Adecco and supplies of workers: a temporary result?

The 2011 decision in Reed Employment held that for VAT purposes the making of a supply of staff requires ceding control from one party to another. Since Reed was unable to exercise control over the worker before the commencement of an assignment it could not make a supply of staff to its client resulting in VAT being due only on the commission element charged by Reed. In Adecco the First-tier Tribunal (FTT) has expressly rejected that approach. Since there was no contract between worker and client the temporary workers owed their obligations to Adecco and the supplies made by Adecco were supplies of staff on which VAT was chargeable in full (not simply on the commission element). This factual and contractual analysis was in line with the economic reality of the situation and the approach to tripartite arrangements pursuant to the Redrow line of...