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Use of Joint Employment Contracts for VAT planning

Joint Employment Contracts to overcome re-charge of staff and overheads between related companies?

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Are Joint employment contracts used effectively to overcome VAT on re-charge of staff and overheads between related companies? The two companies in question are under common ownership and management. 

The alternative approach for this, VAT grouping, is not ideal in our scenario due to partial exemption of the group as making exempt supplies under financial services.

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By WhichTyler
24th Jul 2019 08:32

It's possible, but needs professional advice, good admin and consent of staff (who might want certainty about who they are actually working for)

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By paul.benny
24th Jul 2019 09:01

If you are concerned that VAT grouping will limit the input tax that can be recovered, it suggests that you might already wrongly be recovering input tax on costs relating to the Exempt activity.

But as WhichTyler says, you need proper advice that can take into account the full facts and numbers involved.

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By kiwilondon99
24th Jul 2019 11:49

PAYMASTER arrangement may resolve issue ? staff employed by or on behalf of several related legal entities. I believe no vat is applicable on 'allocating' the costs across

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By Vile Nortin Naipaan
24th Jul 2019 12:02

Why don't you employ the staff by the partially exempt entity and recharge to the non-partially exempt entity, which can recover its VAT? as this will improve the partial exemption position of the partially exempt entity. Joint employment contracts won't help with recharges of overheads, and the partial exemption position will be what it is.

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