Reed Employment Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 24 March 2011
Neutral citation: [2011] UKFTT 200 (TC)
Overall AI summary confidence: medium
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: medium
This case concerns Reed Employment Ltd's appeals against HMRC refusals of VAT repayment claims for supply of temporary workers. The tribunal held that Reed's supplies were limited to introductions and ancillary services so VAT was only due on Reed's commission, that a 2009 Demand was a separate claim (not an amendment of the 2003 Claim), and that HMRC may rely on the unjust enrichment defence in relation to the 2009 claims. The decision on whether repayment would unjustly enrich Reed on the facts was left for later.
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: medium
The tribunal treated the nature of supply in tripartite temp‑worker arrangements as a question of economic reality and the contractual/ factual matrix: where the temporary worker provides services to the client and the agency's role is limited to introduction and ancillary services, the agency's taxable consideration is its commission (the gross charge less pay and associated NIC). The tribunal also asserted jurisdiction under s 83(1)(t) VATA to determine whether claims made at different times are separate for repayment purposes.
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 judgment noted (obiter) that regulatory labels (such as "employment business"), principal/agent descriptors, and industry accounting practices are relevant but not determinative for VAT characterisation, and that control over the worker is a key factor for treating a supply as one of staff. It also observed that retroactive statutory introduction of an unjust enrichment defence can be compatible with EU law provided the defence itself is lawful and does not unlawfully curtail EU remedies.