Supplies of staff

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Supplies of staff
  • What constitutes a supply of staff?
  • VAT treatment
  • Receiving supplies of staff
  • Valuation
  • Agent or principal
  • Specific scenarios
  • Temporarily suspended employment contracts
  • Joint employment
  • Paymaster
  • More...

Supplies of staff

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note provides an overview of the VAT treatment of supplies of staff. Businesses that are involved in supplying staff in the healthcare sector should read the Welfare - supplies of staff guidance note for more information.

What constitutes a supply of staff?

Businesses are treated as making a supply of staff when they provide one of the following to another organisation in exchange for any form of consideration:

  1. an individual who is contractually employed or engaged by the business

  2. a director of the business


The most important requirement is that the member of staff is not contractually employed by the recipient who receives the individual, but comes under the customer's control and direction. If the business provides services, such as catering and construction, to another party and the staff remain under the supplying business' control and direction, this is not a supply of staff but a supply of catering / construction, etc. This is important to remember if the services provided could be liable to VAT at the reduced or zero-rate, or be exempt. Also if the services are provided to a customer in another country, different VAT rules may apply.

If the business is involved in supplying services to customers located in other countries, see the International services ― overview guidance note for more information on international issues and the place of supply.

VAT treatment

If the staff are supplied to a UK customer or a private customer in another EU member state, the place of supply is the UK

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