Not just an introduction

VAT on payment for the supply of non-employed temps

The taxpayers collectively referred to as Adecco were employment businesses that provided temporary staff. In relation to temporary workers who were self-employed (non-employees) and supplied by Adecco clients paid an amount representing the payments that Adecco was contractually obliged to pay the workers for the work they carried out for the clients and a commission for Adecco’s services. Between 1 April 2007 and 31 December 2008 Adecco had accounted for VAT on the total amount clients paid.

As a result of the First-tier Tribunal’s decision in Reed Employment (TC1069) that in relation to the supply of non-employed temps only the commission element of the fee received was subject to VAT Adecco made several claims for repayment. HMRC refused them and the First-tier Tribunal dismissed Adecco’s appeal concluding it was not supplying introductory services but the work...