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12 June 2006
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Business Brief 6/06,9 June 2006
Employment bureaux
Many employment bureaux act either as agents for VAT purposes or, are able, as principals, to use the staff hire concession. In either case, bureaux are only required to charge VAT on their commission, or on an amount excluding salary and other associated costs. HMRC are reviewing these VAT arrangements, taking into account the Department of Trade and Industry's 2003 Conduct of Employment Agencies and Employment Business Regulations. The review will consider issues such as:
- existing use of the staff hire concession and the effect of any withdrawal;
- the VAT treatment of employment bureaux, dependent on their status; and
- the impact of the DTI regulations, under which some bureaux may have changed their business structure in a way that makes them principals when they place staff.
Representations on this review should be sent by 31 August 2006 to Ian Broadhurst, e-mail: ian.broadhurst@hmrc.gsi.gov.uk.
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