Company
accountants have been advised that they need to be aware of imminent changes to the tax laws relating to employing temporary staff.
At present, employment agencies only have to charge their customers VAT on the margin they make when supplying temporary staff.
However, from April 1st next year employment businesses will also be required to charge VAT on the wages section of their fees.
Lisa Topliss, VAT partner at PKF in Derby, told the Evening Telegraph that the change would see the cost of using agency staff rise significantly for organisations unable to reclaim VAT.
"Some businesses could see a 500 per cent rise in the costs of hiring temporary staff," she warned.
Ms Topliss added that there is very little companies can do to prepare for the change, as the costs associated with employing temporary staff directly instead of via an agency would wipe out any saving made on the VAT bill.
Alison Chapman of Deloitte recently advised company accountants to begin preparing for scheduled changes to the
tax regime relating to company cars as soon as possible, as they are likely to have a significant impact on the cost of operating a fleet.
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