Responding to the consultation published by HMRC on 10th December called “Onshore Employment Intermediaries – False Self Employment”, the Association of Recruitment Consultancies (ARC) voices concerns.

Explaining ARC’s initial view, Adrian Marlowe, Chairman of the organisation which represents recruitment businesses in the UK, commented “there is no doubt that some models of engagement are used to avoid tax, and so an adjustment by HMRC is to be expected and indeed welcomed to the extent that the models reflect badly on the recruitment industry. However as they currently stand the draft proposals have a wide ranging scope potentially beyond the extent HMRC has stated that it intends. That scope, if maintained when the legislation is finalised, will affect genuine business to business arrangements as well as pure tax avoidance methods and false self employment. As such it is game changing for the supply of contractors within the recruitment industry.”

“As is our custom we will undertake a thorough legal analysis and present our views to members and then to HMRC as part of the consultation. We hope that the scope can be limited appropriately and that the arrangements should not be overly burdensome to agencies. We are also keen that the legislation should avoid ambiguity with interpretation sufficiently clear so as to avoid the need for lengthy and possibly variable guidance which may lead to confusion and interminable case law.”