The Great Debate UK

Simplify employment tax to kick-start recruitment

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David Ellis-David Ellis is partner and head of human capital at BDO LLP. He specialises in the development of tax efficient, performance driven long term incentive plans for senior employees. The opinions expressed are his own.-

There’s no doubt about it, the UK’s complex employment tax regime is a major barrier for businesses to attracting talent. For our new report, launched today, we spoke to 126 financial decision-makers and we found that 34 per cent would be more likely to employ additional staff if taxes were reduced or reformed.

At present, onerous regulation is the fly in the ointment for recession-hit firms. On average, five individuals in each company are spending 5.6 days a month administering employment tax schemes.

These schemes also impact cash flow, which makes the prospect of the extra expense of new staff unfeasible. That’s why 1 in 3 of those surveyed felt that a simpler scheme would improve cash flow and allow manpower to be reallocated to such activities as new business.

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