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Staff Hire VAT Concession

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

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Staff Hire VAT Concession

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  1. Staff Hire VAT Concession

  2. Scott CraigVAT Partner

  3. Changes to Staff Hire VAT Concession • What are the changes • How will they impact on you • Possible solutions

  4. 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’.

  5. Remember • Supply of staff • Made by principal (not agent)

  6. Who is not affected • Genuine agents • Secondments made for no profit • Sheltered placement schemes • Those who recover all VAT incurred

  7. Who is affected? • Businesses supplying staff who use the concession • You - if you benefit from concession • You - if you cannot recover VAT

  8. VAT & Care Organisations • Make exempt and non-business supplies • Registered for VAT? • VAT is an irrecoverable cost

  9. Impact of the change • From 1 April VAT will be applicable to the full value of staff. • Additional VAT = additional costs • Reduced budgets • Need for additional funding

  10. Are you sure? • Yes – the final countdown… • HMRC undertook a consultation after it decided to withdraw the concession! • Long overdue?

  11. What should you do?

  12. Protest

  13. Ignore

  14. Reduce the cost of VAT

  15. No VAT when… • No supply of staff • No supply • Joint contacts of employment • Genuine agency arrangement

  16. No supply No supply of staff • Supply of exempt services Financial, Medical, Nursing Education, Welfare

  17. Joint contracts of employment But consider legal issues

  18. Genuine agency arrangement • Intermediary finds work/workers • Individual and you enter into direct contract • Intermediary does not pay worker Intermediary services not staff

  19. Schemes/partnerships • HMRC do not approve of tax planning arrangements

  20. Action • Don’t ignore the changes • Consider your position & budgets • Look to reduce the cost of irrecoverable VAT

  21. Need help? • scott.craig@scott-moncrieff.com • 0131 473 3500 or 0141 567 4500 • Specialist VAT consultants in Edinburgh and Glasgow

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