Temporary workers tax under pressure

Charity representatives will submit new data to the Treasury in an attempt to stave off a £20m tax bill on pay for temporary workers.

The Charity Tax Group is in talks with the Treasury about how to reduce the impact of the tax, which will come in next April.

The CTG and the Charity Finance Directors' Group are collecting more information from charities in an attempt to win a reduction in payments.

Helen Donoghue, director of the CTG, said a change announced in the Budget this year (Third Sector Online, 13 March) would fall disproportionately on a small number of charities, especially in the disability and childcare sectors. One organisation has predicted it will face a bill of £1.6m a year.

The change removes a concession that permitted organisations not to pay VAT on the wages of temporary staff.

A Treasury spokesman said the staff hire concession, introduced in 1997, had to be revoked because it was illegal under EU law.

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