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What does the latest Budget mean for recruiters?

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    What does the latest Budget mean for recruiters?


    We take a look at the key takeaways from the budget and what they mean for recruiters:

    Skills and Education

    The lack of skills has been an ever-present factor for a number of sectors, particularly with Brexit looming large. There is a fear among many employers and recruiters that the lack of available skills in this country will widen the gap even further.

    The government has now committed to £20 million for a new fund that will enable colleges to offer so-called ‘T’ levels in Digital, Construction, Education and Childcare. This will complement the £500 million a year pledge to fund the new technical qualifications announced in October.

    At the same time, there will be a tripling of trained computer science teachers from 4,000 to 12,000, while university fees will be frozen at £9,025 a year along with measures to prevent graduates overpaying their student loans.

    The government will also continue to work on how the apprenticeship levy can be spent so that the levy works effectively and flexibly for industry. There have been reports of confusion in understanding the rules around paying the Levy and how this can be spent on apprenticeships.


    Small businesses breathed a sigh of relief when the Chancellor said the VAT threshold for small businesses would be maintained at its current level of £85,000 for the next two years. The government wants to see if the current structure “could better incentivise growth”.


    Caution has certainly prevailed when it comes to pay levels, with the Chancellor seemingly taking on board the Low Pay Commission’s recommendations and those from other lobbying groups include the Recruitment and Employment Confederation (REC).

    Under the new terms, the National Minimum Wage will increase by around 4-5% for all age groups, while apprentice wages will see a marginally higher rise of almost 6%.


    Ahh yes, the one feature of any budget that garners the greatest amount of attention. This budget was no different and from a recruiters perspective the changes – or lack of – made for welcome reading.

    The tax-free personal allowance will rise by £350 to £11,850, while the threshold for paying the higher 40% rate of tax will increase from £45,000 to £46,350 which is only just in line with inflation. Meanwhile, basic rate tax payers will be £1,075 a year better off compared to 2010, according to the Chancellor.

    Meanwhile, the chancellor has said he will introduce 18 new measures to reduce tax evasion including disguised remuneration tax avoidance schemes.

    Now for IR35. Mr Hammond announced a consultation that will look at non-compliance with the IR35 legislation in the private sector. Accordingly, the consultation will “take account of the needs of businesses and individuals who would implement any change” and “draw on the experience of the public sector reforms”. That is the hope, but the fallout from the reforms that were introduced in April has already been shown to impact flexible working in key public services, such as the NHS.

    However, as the REC stated in response to the Chancellor’s statement, there is much room for optimism. It is encouraging that the government has held back from rushing through the reforms to IR35 in the private sector and opting instead to have a “broader consultation on non-compliance”.

    So, was this a good budget for the recruitment sector?

    All in all, it has to be said that yes it was. While it could be argued that the level of investment in education falls short of where many of us would like it to be, it is a positive step forward. Any increase in spend has to be welcomed in order to tackle the growing skills gap which has a direct impact on the bottom line of agencies. The government is also planning to work with the CBI and TUC to boost digital skills and allocate an additional £34m to developing construction skills. Plans to drive growth in local economies are also highlighted in the UK Government’s recently published Industrial Strategy white paper.

    On the question of tax and IR35, again it is a step in the right direction. Of course, we cannot assume that the eventual outcome will be one that all recruiters unanimously favour. However, if a revision of the impact that IR35 has had to date on the public sector can be had then there is always room for optimism.