Its Plant-Tech Limited v The Commissioners for HMRC
Decision date: 10 September 2026
Neutral citation: [2026] UKFTT 1299 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
ITS Plant‑Tech Ltd outsourced payroll to two payroll companies and claimed input tax on VAT charged on payroll-related invoices, including amounts representing wages and employers' National Insurance contributions. HMRC issued assessments denying part of the input tax; the Tribunal found on the balance of probabilities that ITS Plant‑Tech remained the employer and that the payroll companies provided payroll administration only. Consequently VAT charged on amounts representing wages and employers' NIC was not deductible input tax and the appeal was dismissed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where there is no contemporaneous documentation showing transfer of employment contracts or assumption of employer obligations, and the taxpayer retains selection, direction, training and control of workers with payroll records continuing to record them as employees, an outsourcing arrangement will be characterised as payroll administration rather than a supply of staff; payslips or a PAYE scheme in a third party's name are insufficient by themselves to establish a taxable supply of labour for input‑tax entitlement.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated that prior inconsistent treatment by HMRC of a different taxpayer (earlier output tax assessments on ITS Payroll Ltd) does not absolve the claimant of its burden to prove input‑tax entitlement; and that unsupported assertions of a transfer of rights without detail or evidence cannot satisfy the evidential burden for VAT characterisation.
Warning
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