VAT News

VAT treatment of Temporary Staff – The story continues….


HMRC generally take the view that temporary staff agencies have to account for VAT on the whole of the value of the supply including the wage paid to the temporary worker and other employment costs such as NI.  The recruitment industry argue that they should only have to account for VAT on the commission element, not the whole value charged to the employer.

This is potentially a significant issue not only for suppliers in the temporary staff sector but also for their customers who use temporary workers but cannot reclaim the VAT charged.  Examples include the care sector and the NHS.

Adecco UK Ltd, one of the national employment agencies challenged HMRC on this issue in the First Tier Tribunal in 2016 but lost the case.  Adecco subsequently appealed to the Upper Tribunal.  The hearing took place in December and the findings are expected to be published around March 2017.

We expect to report on the outcome of the case in the next edition of this newsletter but if you have any queries, please contact your usual contact at Centurion or Julie Rawlinson-Smith on 07805 134091 or

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