Chancellor George Osborne used his last Budget before the General Election to announce that “Britain is walking tall again” after five years of coalition prudence. Although he has promised that there would be no giveaways he announced tax relief for savers and said a squeeze on public spending would end a year earlier than planned, if the Tories are re-elected in May.
These announcements came on the back of better than expected growth figures, which suggest that the economy will expand by 2.5 percent in 2015, rather than the 2.4 percent previously predicted. He said that the Government had met its 2010 target to end this Parliament with national debt as a share of GDP in decline and suggested that “the hard work and sacrifice of the British people has paid off.” And while the figures still need to be analysed in detail, a number of key issues for APSCo members have emerged.
Responding to George Osborne’s announcement that the Government would be “clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence”, Samantha Hurley, Head of External Relations & Compliance at APSCo, comments:
“The Chancellor’s mention of “agencies” with regard to this issue actually relates overwhelmingly to umbrella companies and PSCs. Unfortunately, it is not entirely clear from the Budget report exactly what action the Government intends to take, although it talks about restricting tax and subsidy relief for workers engaged through an employment intermediary where the worker is under the supervision, direction, and control of the client. In light of this, it’s possible that they may apply a similar test as already exists to determine the workers employment status for tax purposes. This seems to suggest that the Government has abandoned its original plan to abolish tax and subsidy relief for such workers, and listened to the over-whelming response from the industry to tighten the rules instead. This appears to be a more positive outcome for the recruitment sector as a whole, but we will reserve judgement while we await an official consultation.”
In response to the Chancellor’s comment that the Government wants, “employment intermediaries to provide workers with greater transparency on how they are employed, and what they are being paid”, Hurley continues:
“APSCo has previously confirmed to the Government that it does not believe that this is an issue within the professional sector, and we would not want to see our members burdened with more unnecessary red tape to comply with regulation aimed at protecting potentially vulnerable workers. I would imagine that a consultation from BIS on this may well form part of its proposed changes to the Conduct Regulations.”
Summarising other key points raised during Osborne’s speech, Hurley concludes:
“APSCo welcomes ‘Northern Powerhouse’ initiatives – including a Greater Manchester devolution deal, investment in local industry and the green light for HS3. We believe that APSCo members, particularly those based in the North of England, will be able to positively contribute to this proposed growth by providing resourcing partners to encourage highly skilled workers to support these projects. APSCo also welcomes the support being provided to the Oil and Gas sector, one which has been under great pressure in recent months.”
Meanwhile, figures released by the Office for National Statistics (ONS) today show the number of people in work has increased by 143,000 in the three months to January, driving UK employment to a record-high of 30.94 million.
In response to today’s announcements, Ann Swain Chief Executive at APSCo comments;
“It is welcome news, although not unsurprising, that employment levels continue to climb. These figures reflect the positivity in the market that the recruitment profession has witnessed over the past months. Indeed, our latest Professional Recruitment Trends Report found that permanent vacancies increased 26% in the year to February 2015, a trend that shows no sign of abating.”
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