Withdrawal of Staff Hire Concession
And just as I thought I’d found everything on VAT from this year’s Budget I find a Technical Note announcing that the Staff Hire Concession will be withdrawn from 1 April 2009. The threat of this being withdrawn has been hanging over employment businesses for the last couple of years. Finally, with this announcement, employment businesses know they are going to have to charge VAT on the full amount they receive from their clients.
At the moment it is possible for employment businesses to be able to legitimately only charge VAT on the charge they make for supplying temporary staff. This means the client of the employment business doesn’t pay VAT on the wages element of the charge. This is good for the client as they are often unable to recover the VAT. The impact of the withdrawal will mean the the clients have to pay more VAT.
Bad news for all concerned.
Related posts:
