The Recruitment & Employment Confederation (REC) has called on the Chancellor, ahead on Wednesday’s Budget, to rethink his approach to tackling managed service companies (MSCs) to ensure that new rules do not harm flexible labour market. (See Recruiter 21 March)

The REC is concerned that provision to transfer debt liabilities from contractors to recruitment agencies are unclear and further time should be given for agencies to comply with these provisions.

REC chief executive Marcia Roberts (pictured) says: “The transfer of tax liabilities from a contractor’s company to a third party, such as a recruitment agency, is an unorthodox move which REC does not believe is justified. If the Treasury insists on making this move then a delay to the introduction of the third party debt transfer provisions is vital.” 

The REC has also strongly argued that the definition of MSC is too wide and could potentially include recruitment agencies.  The REC has called on the Treasury to explicitly exclude recruitment agencies from the definition of MSC.

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