Accountancy firm Arthur Andersen has warned that PR agencies could
be hit by the phase out of tax relief on profit related pay (PRP).
A report published by Arthur Andersen this week warns that many
employees are unaware of the impact the phasing out will have on their
Caroline Scott, author of the report, said: ’Employers will need to be
prepared and should start planning their replacement remuneration
Agencies who use PRP schemes include Shandwick, Countrywide Porter
Novelli, Charles Barker and Complete Pharma. The report says some
businesses could have to top up employees’ pay by eight and a half per
’The phase-out of PRP is a time bomb waiting to happen,’ said Brian
Friedman, head of the human capital services division at Arthur
Andersen. ’In many cases there is no easy replacement, so it is a
question of how the pain of extra tax is shared between employers and
Chancellor Kenneth Clarke announced the phasing out of PRP between 1998
and 2000 in last November’s budget.