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Court battle over VAT on staff pay

A childcare agency is going to tribunal today (March 17) to argue that agency staff pay should never be liable for VAT. VAT specialist Tony Trotman of Trotman Associates Ltd will be acting on behalf of K&L Childcare Services Ltd, based in Leamington Spa.

VAT specialist Tony Trotman of Trotman Associates Ltd will be acting on behalf of K&L Childcare Services Ltd, based in Leamington Spa.

HM Customs and Excise has confirmed that K&L is liable for VAT but, says Mr Trotman, 'Some agencies are being told that they are liable and others that they aren't.'

At the tribunal, to be held in Birmingham, he will argue that all childcare agencies should be treated equally and in the same way as other care sector agencies.

Customs and Excise has ruled that care agencies, such as those providing staff for the care of the elderly, are VAT exempt because they are providing 'a welfare service', not merely staff.

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