In HMRC v Pertemps [2019] UKUT 234 (7 August 2019) disagreeing with the FTT the UT found that the provision of a salary sacrifice scheme was not a supply of services.
Pertemps was the VAT representative member of a group which provided temporary and permanent workers to clients. For temporary workers it operated a scheme for the provision of travel and subsistence expenses known as ‘MAP’. The relevant workers were employees of Pertemps and under MAP they agreed to a reduction in wages in return for an amount for travel and subsistence. The effect of MAP was that the employee’s taxable salary was reduced for income tax and NIC purposes.
The FTT had found that Pertemps did supply services to the employees but that the supplies were not within the scope of VAT because the operation of the MAP was not an economic activity for...
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