Page 11 - People Group - Joint Employment Features, Advantages & Benefits

Are you in a VAT sensitive industry?
If you operate in an industry with VAT sensitivity or special VAT rules then joint employment alongside the HMRC recognised PEO model by People Group will be particularly valuable.
End clients in sectors such as Healthcare, Insurance, Banking and Charitable operate under different VAT rules, and this has a direct result on choosing appropriate contractual and billing arrangements throughout the supply chain (End-client hirer, Agency, Intermediary, & Worker). In these instances the HMRC acknowledged VAT efficiencies of PEO can represent a significant cost saving to end-client hirers, a margin & gross profit improvement to agencies and/or a compelling net pay increase to workers (where the cost savings are passed down).
Has maintaining liquidity and positive cashflow been more of a challenge in the 2020’s?
Whether your business is growing or shrinking cashflow is often a growth limiting factor. The outside impacts of the COVID pandemic, combined with elongated client payment terms, and the movement of contractors away from limited companies due to IR35 has amplified this issue. Umbrella company invoices attract VAT on the entire transaction
- which places an unwelcome additional cashflow burden on your business. The VAT efficiencies of our PEO model makes your business leaner, and provides ‘free’ cashflow and welcome liquidity.
Does your umbrella company cite the Nurses concession as a reason not to apply VAT on invoices relating to Nurses?
HM Revenue and Customs (HMRC) has very clearly stated that this is not appropriate:
‘umbrella companies do not meet the criteria to apply the nursing concession on invoices to recruitment agencies’
Umbrella companies relying on the Nurses concession expose recruitment agencies to significant financial risk. Genuine joint-employment, such as PEO, does provide genuine HMRC recognised VAT efficiency (VAT is only applied to 1% - 4% of our invoice to recruiters).
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