George Osborne Responds to the REC on VAT in the NHS and the Government’s Investment Strategies for the Future

The Chancellor of the Exchequer, George Osborne, has confirmed in a letter to the REC that HMRC expect to be in a position to update the guidance about the applicability of VAT to locum and temporary staffing in the NHS by the end of this financial year.

Following our high profile media campaign and several meetings with HMRC and different NHS Trusts, this is an important win for the REC, members and staff operating in the healthcare sector. Our key point has always been that we want to support the government’s clampdown on tax evasion and that the best way to do this is to create a level playing field for all businesses through clear and transparent guidance from HMRC. The Chancellor comments that HMRC has undertaken a full investigation of those companies offering VAT schemes in the NHS and thanks to the co-operation of REC and our members, HMRC will be in a position to decide on the first cases brought to them in the coming months.

The REC wrote to the Chancellor ahead of the Autumn Statement in December and emphasised how important fair and equitable taxation policy and investment strategies will be if we are to continue to support the positive growth in the jobs market. It has been a long slog for many of us but now there is a very bright light at the end of the tunnel, we explained why we believe it is now time to invest in infrastructure and development projects that will continue to support business growth.

We also explained why we have pushed so hard to ensure we and our members are playing our part in supporting the UK’s future workforce through the REC’s Youth Employment Charter.  Skills gaps and shortages are already apparent in many important industries for the UK and long term, our best tactic has to be ensuring young people have access to a world class national careers service and the best education and training.

Two of the recommendations from the REC’s Youth Employment Taskforce were also brought forward during the Chancellor’s Autumn Statement on 5th December. Firstly, we suggested National Insurance Contribution holidays for employers willing to take on an unemployed young person and secondly we stressed how employers should be in the driving seat when it comes to the funding for work-based training. We were delighted to see both recommendations come to fruition during the Autumn Statement and in his response letter to the REC, the Chancellor takes the time to explain the new Apprenticeship Grant for Employers – which is specifically aimed at encouraging SMEs to take on new staff. 

2014 is an all-important year for our policy engagement and campaigns as the main political parties are busy drafting their manifesto’s ahead of the May 2015 General Election. If you want to learn more or get involved, please contact kate.shoesmith@rec.uk.com