V6.104 Outsourcing

V6.104 Outsourcing

Many businesses now seek to outsource “non-core” activities to specialists who are able to carry out the task more efficiently, with greater assurance that it will be done properly and, generally, for less cost. Outsourcing can relieve management of the need to manage processes that are, strictly speaking, not within their sphere of expertise. Unfortunately, the VAT system can be very unfriendly towards outsourcing. This is because the chief feature of outsourcing is that an independent third party carries out the work.

Since the VAT system seeks to tax the activities of independent entrepreneurs, it follows that they are

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