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HMRC firm on removal of VAT staff hire concession

HM Revenue & Customs has re-iterated its position that the VAT staff hire concession will be removed from 1 April.

Tom Hadley, Recruitment & Employment Confederation (REC) director of external relations, told Recruiter the REC received a letter last week indicating that HMRC "is sticking to its guns".

Hadley says the letter restated HMRC's view that the concession "is against EU VAT regulations, and therefore can't be maintained".

He says the REC will continue speaking to HMRC, and will be writing to the Department of Health and the Department for Business Enterprise & Regulatory Reform. "This is not a technical issue. This is an issue of jobs," Hadley adds.

Removing the staff hire concession is estimated to add £400m to the cost of employers using temporary workers, and will lead to fewer temporary workers being used.

The sectors to be hit include: health and medical, finance and education, with clients unable to claim any of the VAT back.

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