Ruth Corkin comments on long awaited Adecco decision

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Ruth Corkin comments on the release of the Court of Appeal decision in the Adecco UK Limited (and others) case.

The case concerns “non-employed temps” supplied via employment businesses. Adecco argued that it did not provide the temps but merely introduces them to clients. The Court disagreed and ruled that VAT was due in the commission and the amounts paid to the temps by Adecco.

Why is this important?

For certain sectors e.g health, education, welfare and no-for-profit, imposing VAT on the full charge will be an unwanted cost.

Aside of the main judgement, there were a couple of comments that caught my eye. The first was on page 19 of the judgement which says: “Had Adecco received sums from clients merely as ‘repayment of expenditure incurred in the name and on behalf of’ clients, it would have been able to invoke Article 79 of the Principle VAT Directive [i.e disbursements] but it did not or could not.” Does this now mean that we will see restructuring of contracts?

The second comment is on page 21 at paragraph 52 which says “ I do not think, however, that the distinctions can justify the conclusion that the FTT [First Tier Tribunal] arrived at Reed Employment case. It seems to me, with respect, that the case must be considered to have been wrongly decided.” Will we see claims revisited?

Contact Ruth Corkin if you have any questions about VAT or indirect tax.

For the full decision in Adecco UK Ltd & Ors v Revenue & Customs [2018] EWCA Civ 1794 (30 July 2018)

Do you need extra information?

Ruth Corkin - Prinicipal - VAT and Indirect Tax Advisory at Hillier Hopkins

Ruth has been involved with VAT for over 30 years. She started her VAT career as a Customs and Excise Officer in Essex and then moved into consultancy with a variety of well-known accountancy firms. She is well known in the VAT world and is the proud author of many articles and technical works.

Contact Ruth at or on +44 (0)1908 713860

Based at the following office - Milton Keynes, Watford and London