Business insurance holders could find it more difficult to hire temporary staff due to changes in value-added tax (VAT) which will impact on the cost of employing these workers, according to an expert.
Tom Hadley, director of external affairs at the Recruitment and Employment Confederation (REC), describes the government's decision as "disappointing".
He says the organisation believed there was a good chance of alterations to the VAT Staff Hire Concession being delayed until after the recession.
"If you are looking at what stifles or hinders job creation, any extra cost and bureaucracy isn't going to help that situation," he asserts.
Mr Hadley states that this is not the best time for this to be implemented for business insurance holders due to the additional burden it will place on them.
He adds that the REC is working with the Department for Work and Pensions to offer additional guidance but says that without vacancies being available the effectiveness of this will be minimal.
The VAT Staff Hire Concession will be withdrawn from April 1st, meaning companies will have to account for tax on the full value of their supply.
