Secondments or Supplies of Staff – VAT treatment

Secondments or Supplies of Staff – VAT treatment


 It has become apparent that there are a significant number of secondments or supplies of staff such as:

  • secondment of schools staff to Babcock in support of the targeted intervention support programme (TISP) and other programmes
  • secondment of staff to joint services with NHS
  • secondments to other local authorities and public bodies.

As the sums involved are often considerable, it is imperative that VAT is treated correctly to avoid potential financial penalties and interest from HM Revenue and Customs. Please note any penalties and interest imposed by HMRC will be charged to the budget holder.

It is also extremely important to make sure the debtor account clearly describes what the invoice is for. There are many instances where descriptions are unclear and this makes it difficult to identify what the income is for and what the VAT treatment should be.    

If you are unsure what VAT treatment should be applied, please contact the VAT Team before raising any debtor invoices. Our contact details are:

 VAT Team

Room G84, County Hall

Phone: 01392 382842 or 01392 382410

Email: vat helpdesk – mailbox


 Secondment  / Supply of staff to another organisation

Supply of staff is normally seen as a taxable supply of services, and this should be the default position. There are a limited number of exceptions to this rule, which are discussed below.

However, for the vast majority of occasions where the Council or any of its establishments such as schools second or supply staff to an external organisation VAT must be charged at the current standard rate of 20%.

This applies whether we are providing staff to another local authority, health authority, non-for-profit organisation / charity, academy school or private company (such as Babcock).

This also applies even if it is simply a recharge of the salary costs.


Main Exceptions

 1. Supply of teaching staff to another provider of education (schools only)

 This applies only if teaching staff are seconded to Colleges of Further Education, Universities, Grant Maintained Schools, Academy Schools or Examining Bodies, then the secondment is Exempt from VAT.

 Supplies of teaching staff to any other type of organisation, such as Babcock, must be treated as a standard rated supply and VAT charged.


2. If the staff secondment is in place because only personnel from the Council can perform that seconded role (all services)

 This exception is only likely to occur where there are statutory working arrangements such as with the health authority. In these instances, the recharge of salary can be treated as Outside the Scope (OOS) of VAT, and no VAT added.


 3. If the member of staff is employed on a joint contract with the organisation where the staff member is seconded (all services)

 In this case, the Council is acting as “host” and recharging an agreed amount for the member of staff and that recharge can be treated as Outside the Scope (OOS) of VAT, and no VAT added.


Other Exceptions

 There are other exceptions relating to secondments of school staff where it is possible that the VAT treatment will be either Exempt of Outside of Scope. These are:

  • Supply of teaching staff for direct teaching to pupils
  • Reimbursement of costs from a university/college for members of teaching staff who are training
  • Secondments of Voluntary Aided School staff

If you are charging for any of the above services, please contact the VAT team to see if an exception applies.

 Please note, local payment schools are part of the Council therefore all transactions with them should be treated as Outside the Scope (OOS) of VAT. 

 In all other instances of supply of staff to an external organisation VAT must be added.


 Staff expenses related to any secondment

If a member of staff incurs additional expenses, such as travel costs, relating to the secondment and it has been agreed that these costs will be passed on, then provided they are clearly identified and recharged at or below cost, recharges of expenses can be treated as Outside the Scope of VAT.

 If you are unsure what VAT treatment should be applied, please contact the VAT Team before raising any invoices. Incorrect treatment of VAT may lead to HM Revenue and Customs issuing penalties and interest which will be charged to your service.  


VAT Team


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