Expert: VAT news is not all bad for contractors

Date: July 02, 2010

Category: Employment Law, Taxation and Legislation for Contractors

The forthcoming VAT rise, which is scheduled for January 2011, will be difficult for businesses and contractors using umbrella companies to deal with, but according to an expert the situation is not completely negative.

British Retail Consortium (BRC) director general Stephen Robertson said that although the increases are going to be difficult for retailers to cope with, he thinks that the government has done well to not expand the number of VATable products.

He said: "The start date, in the middle of the busy and crucial post-Christmas sales period, will be difficult but retailers would rather have more notice than less. Six months to prepare is better than the rise coming-in this summer."

The BRC also predicted job losses, which could mean that contractors' services are more in-demand because they provide cost-effective labour and a flexible solution for employers.

A recent Recruitment and Employment Confederation (REC) survey entitled JobsOutlook predicted that there will be an upsurge in interest in umbrella companies and contractors who use them in the next 12 months.

Posted by Daniel Frost