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Financial services facing £250m VAT bill over temporary staff

The financial services sector could be left facing a £250m a year VAT bill for temporary staff under Government proposals for the recruitment industry reports the Financial Times.


The proposals would see financial services firms hit by the massive bill as they would have to pay VAT on wages they pay temporary staff. At present they only pay VAT on the fees paid to the employment agency.


The proposals put the industry on the same footing as other businesses, but at a further disadvantage because banks and building societies cannot reclaim VAT.

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