Businesses fear tax changes for self-employed – REC

Over half (53 per cent) of employers would have to take action if today’s budget introduces new measures which would increase their staff costs because of changes to taxation such as IR35. One third (30 per cent) of employers would have to increase their prices, according to the latest JobsOutlook survey by the Recruitment & Employment Confederation (REC).

Employer confidence has already taken a knock with 33 per cent of employers feeling economic conditions are worsening, compared to just 26 per cent who feel they are improving. This means that confidence in economic conditions remains negative for the fourth consecutive month.

The latest JobsOutlook survey of 600 employers also shows:

  • Two in five (42 per cent) respondents expressed concerns that not enough permanent workers would be available to meet their demands and 40 per cent say the same for temporary agency workers.
  • 80 per cent of employers say they have none or just a little spare capacity in their organisation to take on more work without new staff.
  • One fifth (22 per cent) of employers still plan to hire additional permanent staff in the next four to 12 months.

REC chief executive Kevin Green says:

“Businesses do not want any change to taxation in today’s budget, which would create more difficulty in attracting and retaining talent. The fact that over half of employers would have to react if they face increased costs is very concerning. We demand that the chancellor does not make a difficult situation even worse for employers.

“At the moment, businesses are still planning to hire – something which is not very easy as the pool of available workers is shrinking. We hope that today will not add another burden to their plans.

“We don’t know how Brexit negotiations will move forward and what this will mean for EU workers here and for UK trade. Bearing this in mind, it is not surprising that a higher number of UK employers still think that the UK economy is deteriorating rather than improving.”

Ends

Notes to editors:

1. For more information, contact the REC Press Office on 0207 009 2157/2192 or pressoffice@rec.uk.com. An ISDN line is available for interviews on 0207 021 0584.

2. JobsOutlook is produced by the REC in partnership with ComRes. ComRes interviewed 600 UK employees and owners involved in hiring by telephone between 25th July and 19th October 2017. Data were weighted to be representative of UK adults in employment by region, broad industry sector and public / private sector split. ComRes is a member of the British Polling Council and abides by its rules. Data tables are available at www.comresglobal.com

3. In relation to the budget, we surveyed 200 people involved in hiring in October.

If the chancellor introduces new measures which may add payroll costs to your business (for example, like when Pension Auto Enrolment or changes to IR35 were introduced), which of the following actions, if any, would your business take?

Action Per cent respondents
Increase the prices of our products or services 30%
Unplanned freeze to salaries 14%
Unplanned headcount freeze 12%
Unplanned redundancies 10%
Increase the use of contractors or outsourcing 9%
Other 12%
We would not need to take any action to mitigate the effects 47%

4. Jobs transform lives, which is why we are building the best recruitment industry in the world. As the professional body for recruitment we’re determined to make businesses more successful by helping them secure the people they need. We are absolutely passionate and totally committed in this pursuit for recruiters, employers, and the people they hire. Find out more about the Recruitment & Employment Confederation at www.rec.uk.com