PRESS RELEASE
22 October 2007
Two thirds of recruitment agencies believe that the introduction of an accreditation scheme for accountancy service providers would enable them to establish or reinstate a preferred suppliers’ list (PSL).
According to a survey recently carried out among senior agency management by JSA, one of the UK’s leading specialist accountants for contractors, two thirds of technical agencies no longer operate a PSL for fear of being caught up in the recent managed service legislation and ancillary transfer of debt provisions. Half the respondents also said that the legislation has had a negative financial impact on their business.
All the agencies that responded to the survey said that they would support HMRC’s suggested Audit provisions, while 77% of respondents believed that the current managed services legislation is forcing some of their contractors into umbrella companies when other options may be more suitable. Despite this, only 21% of respondents thought that this was having an inflationary effect on hourly rates demanded by contractors,
Perhaps more worryingly, nearly 50% of respondents expressed concern that some of their contractors were falling into potentially illegal tax schemes as a result of the new legislation and the consequential fear for agencies imposing a strict PSL.
Barry Roback, Chief Executive of JSA said: “The results of this questionnaire demonstrate only too clearly the unintended consequence of the recent managed service legislation. The vital link between agencies, contractors and accountancy service providers has been temporarily severed and it is going to need a lot of persuasion and firm guidelines from HMRC before agencies are once again prepared to return to PSLs.”
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Barry Roback Is Chief Executive Of The JSA Group Of Companies, JSA Services Ltd, JSA House,110 The Parade, Watford WD17 1GBW (www.jsagroup.co.uk) Tel: 01923 257 200.
For further information contact Robin Liston, press relations adviser to JSA on 0208 883 7314/ 07740 829171 or robinliston@pobox.com or Barry Roback, Chief Executive of JSA on 01923 257 202 or roback@jsagroup.co.uk