We act for some commonly (majority) owned companies and LLPs (some of which are VAT registered, some not because of exempt supplies).
One of the VAT registered companies employs someone who carries out work for all the companies, so the cost is shared.
There isn't any way of avoiding charging VAT on the cross charges is there? Even if no profit element (straight recharge of cost)?
The other alternatives are to employ the person in one of the non VAT registered companies, or to have the person employed a little by each company/LLP (but NIC would need considering), or stand that VAT cost.
Thanks for any suggestions.
Replies (4)
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Joint contract
The answer here is to have the employees contract drawn up so all the companies are their joint employer.
Yes I believe so
As far as I am aware this is fine and I have certainly seen this pass muster in the past. The point is that one company operates the PAYE scheme for simplicity but because all companies are legally employing the staff member they are reimbursing their share of payroll cost and not paying a VATable recharge.