The recruitment industry seems to be falling under HMRC’s microscope with an ever increasing frequency and this has already led to  various changes to legislation with more on the way. Micro business or limited companies with one director are often regarded as simply being convenient vehicles that people use to avoid paying tax and NIC, although obviously this is far from the truth in most cases. The circumstances for self-employed contractors are becoming ever more complex as the government’s views on what constitutes self-employment continues to move the goal posts and many limited companies have come into being simply due to pressure on the self-employed sector to adapt to new rules and regulations. The FT recently reported that around four million companies that have incorporated don’t actually have any employees, and although HMRC has put forward a figure of £400 million as lost revenue this would only represent £400 per company being lost to the treasury. For recruitment agencies the future of limited companies in the contracting sector means dealing with more red tape and putting time and energy into making sure they and their clients are compliant with each change in the law. However, as these workers are not only in great demand but also boost company output, are an asset to the UK economy and contribute significantly to the UK overall tax take, it would seem that HMRC might be better placed making things easier for the sector rather than putting obstacles in the way. With agency reporting now mandatory every quarter, HMRC will have the intelligence to maximise wins from tax enquiries in the future so the need for a further tightening of legislation could appear heavy handed to the neutral observer. For those involved in the sector professionally all the latest news in at news.crystalumbrella.com