HMRC have announced the withdrawal of the staff hire concessionary arrangements with effect from 1 April 2009. This concession effectively allows employment businesses to charge and account for VAT solely on the margin of their supplies of temporary workers and is a particularly popular arrangement within the Finance, Insurance and Not-for-profit sectors where input VAT recovery is restricted. These changes will bring the VAT position into line with EU and domestic employment law, but nonetheless will potentially have a major cost impact on businesses employing temporary workers who are unable to recover their input VAT in full.
Staff hire concession
