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July '06
HMRC announces start of a review of the concessions that allow agencies to charge vat only on their margin charge.
HMRC has announced in its business brief 06/06 the start of a review of the staff hire concession and the employment business concession, set out in business briefs 02/04 and 10/04. The purpose of the review is to take into account the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
So what is this all about?
The concessions affect organisations that use employment businesses, where the organisation, for example, is a charity or financial institution. The concessions allow for the employment business to charge vat only on the margin or gross profit element of its overall charge to the client. This business is commonly known as vat margin only business
The review now is presumably to consider whether
- to continue to allow the concessions as they currently stand or
- whether any adjustments need be made to them, or
- whether they should be ended altogether.
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