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Adecco: employment contract has primacy

Kevin Carletti and Jill Bromwich (KPMG) review the VAT implications of utilising the services of temporary workers.
 

The importance of contractual relationships and how or whether they reflect the economic realities of a transaction has been the subject of much discussion in the UK courts. Following the decisions of the Supreme Court in cases such as WHA v HMRC [2013] UKSC 24 Secret Hotels2 Ltd v HMRC [2014] UKSC 16 and Airtours Holidays Transport Ltd v HMRC [2016] UKSC 21 it is now a well-established VAT principle that as a starting point it should be assumed that the VAT analysis of a transaction should follow the contractual position. It is only necessary to deviate from this stance in circumstances where the contracts are sham or by reference to the fact pattern do not reflect economic and commercial reality. Taking this into account the...

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