Only a few days ago I posted a blog on the VAT case of Reed Employment, concerning a VAT case appeal in regard to temp worker supplies, which pointed out certain surprising elements in the tax tribunal's analysis. The blog ended predicting that HMRC would appeal, or else clarify its reasons not to, which would, in effect provide their reasoning as to why the case had little or no general application.
Today we learn that HMRC has decided not to appeal (although this assumes that there are no crossed wires in this). We do not know whether they will now provide the reasoning that would seem essential in order to defend against a flood of claims. Why has this happened?
It is puzzling. I should explain that Reed in any case needed to appeal against an aspect of the decision which blocked their path, that of "unjust enrichment". So, HMRC could have cross-appealed on the aspect of the case that went contrary to their interests. For some reaosn they have not. They may well win the Reed case without doing so (I have not given that sufficient thought to take a view) but where does that leave their policy on the general status of temp worker arrangements?
The most likely cause is that they fear entrenching the adverse decision by having it upheld on appeal. That would make the decision binding. They may feel that they want another bite of the cherry with a fresh case, a fresh tribunal, and a focused look at the current regulations and at contracts made under those regulations. If so, then it amounts to putting down a challenge to agencies and their clients to do their worst and to bring on the fight.
If there are any agencies or their clients who wish to engage in that fight, then we would be very happy to assist. It is a worthy cause. The current VAT treatment stifles business, and a chance to tackle this and potentially save a pointless tax cost is welcome.
Contact me on 020 7969 5610 or gelliott@haysmacintyre.com
Terms & Conditions
- Information and ideas shared in this blog are intended to inform rather than advise. Circumstances vary greatly and if you feel that the information provided is beneficial you should contact us before implementation. We will not accept responsibility for any financial or other loss incurred as a result of the action you take from reading these blogs and their comments.
- haysmacintyre reserves the right to delete or alter posts at its own discretion and without notice or explanation. Comments posted on the site which haysmacintyre deems to be unacceptable or inappropriate will be removed. This includes but is not limited to:
- anything which is obscene, pornographic or otherwise objectionable or illegal;
- violations or infringements of any statutory, common law, copyright, design right or any other intellectual property rights of any other person or entity;
- commentary which contains material which would be in breach of confidence or in contempt of Court;
- viruses or other similar contaminating or destructive features.
- Outside of UK office hours, comments will not appear on the site until they have been accepted by the moderator.
- Your name will be displayed by your comment. All other personal details will remain private. haysmacintyre will not add your details to any of its mailing lists or its database unless specifically asked to do so. (Please complete our newsletter sign up form if you want to be added to our mailing list). Your details will not be shared with third parties.
- Material may not be copied, reproduced, republished, downloaded, posted, broadcast or transmitted in any way except for your own personal non-commercial use.
- While haysmacintyre will keep web links as up to date as possible, it cannot guarantee the suitability or accuracy of content to any other sites.
- For more information please read our full privacy policy.
- If you have questions or concerns regarding the use of the haysmacintyre blog please call our marketing team on 020 7969 5668 or email marketing@haysmacintyre.com
Media right usage
If you seek permission to use these blogs or any of their content on your own website or as the basis of an article you are writing, or to interview the author, please contact our marketing department on 020 7969 5668.