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