The introduction of a 'tax on jobs' by the government could threaten temporary staff vacancies, according to the Recruitment and Employment Confederation (REC).
From April 1st, the VAT Staff Hire Concession will be withdrawn in the UK, meaning that firms providing staff will have to account for VAT on the full value of their supply.
The REC believes this will hinder job creation as many firms rely on temporary staff as a way of having a reduced risk workforce during the recession.
Tom Hadley, director of external affairs at the REC, said: "We are doing a lot of work with the Department for Work and Pensions to help provide guidance to job seekers but we need to make sure there are still opportunities out there."
Capita has recently been selected by the Office for National Statistics to recruit temporary workers to carry out the 2011 Census of Population and Housing in England and Wales.