The Court of Appeal dismissed Adecco’s claim for repayment of £11m of VAT. The Court held that the group of employment businesses had to account for VAT on the entire fee that they charged to their clients when they supplied temporary workers. The Court rejected Adecco’s argument that they were only providing introductory and ancillary services (including payment of the temps) to the client and that in economic reality it was the temps themselves who provided the work services to the client. It rejected Adecco’s argument that the relevant element of the money paid to Adecco by the client was third party consideration for a supply by the temp to the client. The Court further held that the decision of the FTT in the similar case of Reed Employment v Revenue and Customs Commissioners  UKFTT 200 was wrongly decided.
Eleni Mitrophanous and Laura Prince were involved in this case.