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VAT liability of payroll services

This brief tells you about HMRC’s position following the decision by the Cheshire Centre for Independent Living (‘Cheshire’) to concede the appeal in the Upper Tribunal. Because the Upper Tribunal set aside the decision of the First-tier Tribunal, there is no change to HMRC’s position which is that the Cheshire case was wrongly decided on the grounds set out by the First-tier Tribunal.

The case concerned the VAT liability of payroll services provided to disabled persons to enable them to employ a personal assistant to help them to live in their own homes. The issue was whether this was a service directly connected with the provision of care and therefore exempt.

Source gov.uk

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