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Government decision 'pushes up temporary staff costs'

02 Oct 2008

Government decision 'pushes up temporary staff costs' A government decision to rescind the VAT Staff Hire Concession in April of next year could damage temporary recruitment, it has been reported.

The concession was introduced by Her Majesty's Revenue and Customs (HMRC) as a temporary measure, but according to the Recruitment & Employment Confederation (REC) removing it in the near future could be damaging.

In a meeting with HMRC this week, the REC is expected to outline the added costs employers would experience when recruiting part-time and temporary staff if the concession was withdrawn.

REC chief executive, Kevin Green said: "We are looking for constructive discussions on how we can avoid the fallout from the added costs that the removal of this concession will lead to."

Students may be interested to hear that the REC estimates employers will face a £400 million bill if the deal is rescinded and may reconsider their temporary employment policies as a result.

According to HMRC, the concession, which was introduced in 1997, will come to an end on April 1st 2009.

The department claims those affected by the changes will include businesses in the finance sector, healthcare, education, charities and some parts of the public sector.

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