Staff Hire VAT Concession
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Transcript of Staff Hire VAT Concession
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Staff Hire VAT Concession
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Scott Craig
VAT Partner
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Changes to Staff Hire VAT Concession
What are the changes How will they impact on you Possible solutions
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The change
From 1 April 2009
‘All businesses making supplies of staff as principal have to account for VAT on the full value of their supply’.
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Remember
Supply of staffMade by principal (not agent)
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Who is not affected
Genuine agentsSecondments made for no profitSheltered placement schemesThose who recover all VAT incurred
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Who is affected?
Businesses supplying staff who use the concession
You - if you benefit from concessionYou - if you cannot recover VAT
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VAT & Care Organisations
Make exempt and non-business suppliesRegistered for VAT?VAT is an irrecoverable cost
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Impact of the change
From 1 April VAT will be applicable to the full value of staff.
Additional VAT = additional costsReduced budgets Need for additional funding
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Are you sure?
Yes – the final countdown…HMRC undertook a consultation after it
decided to withdraw the concession!Long overdue?
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What should you do?
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Protest
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Ignore
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Reduce the cost of VAT
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No VAT when…
No supply of staffNo supplyJoint contacts of employmentGenuine agency arrangement
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No supply No supply of staff
Supply of exempt servicesFinancial, Medical, NursingEducation, Welfare
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Joint contracts of employment
But consider legal issues
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Genuine agency arrangement
Intermediary finds work/workersIndividual and you enter into direct
contractIntermediary does not pay worker
Intermediary services not staff
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Schemes/partnerships
HMRC do not approve of tax planning arrangements
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Action
Don’t ignore the changesConsider your position & budgetsLook to reduce the cost of
irrecoverable VAT
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Need help?
[email protected] 473 3500 or 0141 567 4500Specialist VAT consultants in
Edinburgh and Glasgow