Budget 2007: Good news for agencies
The Chancellor of the Exchequer has announced in his Budget 2007 a delay to the application of the legislation relating to Third Party Transfer of Debt. The draft legislation that was published on 8th February had given the application date as the 6 April 2007, but this has now been delayed until 6 January 2008 for recruitment agencies.
The Chancellor also confirmed that the legislation would not extend to end clients, which had originally been feared. This announcement will come as a great relief to the recruitment industry as it will give agencies extra time for them to work with the right business partners.
The legislation governing the future treatment of Managed Service Companies is to go ahead, although the Treasury has altered the definition of a Managed Service Company in an attempt to give greater clarity and certainty.
The new definition builds on the original criteria of an MSC exercising control over the finances or general management of the company, adding a focus on the role and business of the MSC scheme provider itself. The exact definition of an MSC will be contained in the Finance Bill 2007 to be debated by Parliament in the coming weeks.
From today’s announcement it can be interpreted that those companies who provide services to a service company in the course of a different type of business, such as the provision of accountancy services or employment businesses, will not be caught within the MSC definition. There is also an exclusion for agencies that do not influence or control the finances of the companies or the way in which payments to individuals are paid. This is more good news for the recruitment industry.
Commenting on Budget 2007, Eugene Lantry, Group CEO of Charterhouse Group International said,“It is clear that the Treasury have listened to the feedback provided in the consultation period. Charterhouse is all too aware of the concerns being raised by the owners of recruitment businesses and their anger at being dragged into the situation that was not of their making.
The actual definition of a managed service company is eagerly awaited. Charterhouse Group provides a diverse range of services offering accountancy, tax and factoring services to UK businesses, back office administration to recruitment companies as well as corporate and trust services to international clients. Charterhouse was established 20 years ago and we look forward to working with our clients and business partners into the future.”
Further information from:
Lisa Underwood – Head of IOM Sales & Marketing
Charterhouse Group International Limited
Bourne Concourse, Peel Street, Ramsey, Isle of Man, IM8 1JJ
Tel: 01624 818 360 Fax: 01624 818 515
Email:
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