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Why Does Recruitment Have to be so Taxing?

TEAM Members inside and outside the UK are facing major statutory challenges. For example, you and your clients – indeed, all businesses in the UK - have to operate using a tax code which has been described as “a complex and impenetrable assembly of piecemeal rules, accumulated over decades without having any overall review.”

6 years ago, the UK government decided to simplify and reduce the size of the tax code. From the Treasury Department arose The Office of Tax Simplification.

“How successful has the OTS been?” asks Mike Phillips, Marketing Director of ItsInternational – international service provider for TEAM Members

In 6 years, the tax code has doubled in size to 10 million words and is now 12 times the length of the King James Bible. Although it has been rewritten in a ‘de-jargonised’ précis-format, some important details are not readily accessible. This can make it challenging for accountants seeking to furnish their clients with definitive advice. Such “simplification” also makes it difficult for the public (including recruiters, clients, candidates) to easily extract reliable information.

Rather than exclusively correcting defective legislation with specific measures, the UK government has placed the onus for change directly onto its citizens and UK businesses. For example, British taxpayers are expected to identify with “the spirit of the law”. To influence that thinking, government often prefaces ‘tax avoidance’ with “aggressive” or “abusive” - seemingly relegating it to the murky depths of ‘tax evasion’.

Across the globe, governments continue introducing more and more tax legislation and labour regulation. In Europe, this has been compounded by EU law which is supposed to supersede individual Member State law.

Since the global financial crash in 2008, all governments have been creating and reinterpreting tax laws to bring much needed revenue into their Treasury coffers. A recent example in the UK is the authorities’ apparent attack on the domestic contracting market. According to Mike Phillips: “This reflects government’s ongoing frustration with the recruitment industry which seems to stand accused of foiling ‘disguised employment’ legislation. TEAM members and their clients now find themselves directly exposed to statutory investigation relating to tax and labour law issues facing placements and umbrellas. Sadly, no party with a vested interest in the recruitment market escapes accountability. This includes accountants, lawyers, recruiters, recruitment and contractor trade bodies as well as candidates and clients.”

There are still recruiters and candidates basing the suitability of an international umbrella or management company exclusively on “how much do you charge?” and “what is the retention?”. This has always been a naïve test. Thankfully there is a growing number of progressive recruiters and responsible candidates strongly factoring ‘Contractor Compliance’ into their processes. Those forward-thinking recruiters have undertaken a radical change of business practice. Instead of “sales at any cost” (previously drawn by either an absence of management control or, more likely, a lack of knowledge), their new mantra is for sales which are driven by solid due diligence reflecting their commitment to safety and security for all parties in the contract chain.

As a TEAM member, you are a highly-focussed recruiter with an adept skill of precisely matching candidates’ abilities to client needs. Organisations like ItsInternational focus on due diligence protocols and contractor compliance. This could become a successful, sparkling partnership. “To find out more, call me on +44 (0)20 7477 2660 or email me at

As a reliable and risk-averse provider of fully-compliant ‘solutions’ for your contractor and interim placements across Europe and other key regions such as Asia Pacific and North America, ItsInternational works closely with locally-regulated service providers and locally-registered employers-of-record to ensure your valuable placements are structured to operate your assignments within the laws of their countries of work. This process is transparently driven by our local network in unison with local tax and immigration offices. Our passion for full compliance and your passion for profit-optimisation make a perfect partnership!

As a TEAM Member, if you are either placing or aspiring to place consultants or interims abroad on fixed-term assignments, you can benefit from accessing the TEAM INTERNATIONAL HELPLINE – a free service provided by ItsInternational’s Central London offices exclusively for you.

Either call 0044 (0)20 7477 2660 for your complimentary consultation or email us at

For more details, visit