1. Staff Hire VAT Concession

2. Scott Craig VAT 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