Page 13 - People Group - Joint Employment Features, Advantages & Benefits

CA
Cash Flow
Many recruitment agencies utilised the Chancellor’s VAT deferral scheme. Indeed this deferral provided a much
SH F
business during lockdown? Would you
LOW SAVINGS
like to make this a permanent feature
Savings
Whilst joint employment offers needed lifeline to many recruiters, and VAT cash flow savings alongside allowed them the breathing space from a number of other benefits, there operating capital. People Group can are certain costs that are vatable help you to continue the effects of the as confirmed by HM Revenue & VAT deferral indefinitely.
Customs (HMRC). See HMRC letter
on pages 13/14.
Was VAT deferral used in your
for your business?
96% to 99%
Non-disbursements
1% - 4%* VAT chargeable
• Insurance costs
• Internal staff costs
• Legal and tribunal
• Postage/stationery/print
• IT and technology
• Bank charges (BACS) -
worker, HMRC, pension Disbursements
96% - 99%* No VAT chargeable
• Wages
• Employer’s National
Insurance
• Employer’s pension
• Apprenticeship Levy
• All statutory pay
Explained
A weekly wage bill of £30,000 from PEO attracts VAT on 1% of the value.
Wage bill
Vatable element
20% VAT
Total Agency Cost
£30,000
£300
£60
£30,060 (Vs Umbrella £36,000)
*Annually we assess the actual cost of disbursements and non- disbursements under this model. This process sets the % VAT applicable for the forthcoming year. E.g. (1%to 4%)
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