Graham Elliott, VAT expert at City & Cambridge Consultancy considers the Adecco (UKUT0133) ruling on temp workers which leaves the company with a VAT charge, input tax issues in U-Drive over repair bills and the low cost traders' flat rate scheme
Case: unhappy outcome for Adecco over temp workers
The Upper Tribunal decision in Adecco (UKUT0133) confirms the decision made by the First Tier Tribunal, and in doing so puts the potential conflict between its decision and that of Reed Employment (TC01069) seemingly behind us.
The issue is whether a staff agency (Adecco) should account for VAT on the full value of the service supplied by self-employed temp workers, or only on the element of the charge representing the agency’s addition to the salary cost of the worker.
It was accepted that, where a worker was Adecco’s employee, the entire supply was taxable.
But Adecco argued that this was not the case for self-employed temps. All they were able to do for the staff user was to arrange for the individual to attend the work place and to deal with the money flows between the user and the worker.
