Overview

HMRC’s view since 1 April 2009 is that VAT must be charged not only on the commission fee for the introduction of the temporary worker, but also on the temporary worker’s remuneration, PAYE, NIC and so on. Following the recent case of Reed Employment Ltd it is arguable that agencies should only charge VAT on their commission fee. The worker’s remuneration and the agencies PAYE/NIC and associated costs should remain VAT free.

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