VAT specialists
Value Added Tax
For anyone in the recruitment business who deals with accounting and invoicing matters on a daily basis, you will know that VAT is notoriously complicated and time consuming.
VAT consultancy is about helping you navigate complex VAT rules with confidence. In the recruitment sector, things can quickly get complicated — especially when you’re working across borders, placing contractors in exempt sectors like healthcare, or facing unexpected VAT assessments. That’s where we come in. We provide clear, practical advice tailored to your business, ensuring you stay compliant and fully prepared for any HMRC review or investigation. From avoiding costly mistakes to dealing with challenges head-on, we make VAT less of a headache — so you can stay focused on running your agency.
We’ve supported a wide range of recruitment businesses — from specialist medical agencies to fast-growing international firms — in navigating complex VAT challenges while protecting their commercial interests. Here’s how:
Applying the Nursing Agencies’ Concession with Confidence
We’ve worked closely with medical recruitment firms to ensure the nursing agencies’ concession is applied correctly where applicable, fully aligned with HMRC guidance. By getting this right, our clients remain compliant — while also receiving commercial advice to protect margins. When placing VAT-exempt staff into end clients like hospitals or care homes, agencies are unable to reclaim VAT on associated costs (such as umbrella company fees). We advise not only on the correct VAT treatment but also on ensuring the contracts you’re entering into still make commercial sense.
Correct VAT Treatment for Broader Medical Staffing
There’s often confusion around the VAT treatment of doctors and other healthcare professionals. We help agencies navigate this by reviewing VAT guidance — including advice provided by end clients, which can sometimes be incorrect — and ensuring the correct VAT treatment is applied, backed by sector-specific insight.
Cross-Border Recruitment and International VAT
For clients supplying contractors overseas — into the EU, US, Middle East and beyond — we offer clear, practical VAT guidance tailored to international placements. Leveraging our BOKS International network, we access local tax experts in relevant jurisdictions, giving you the confidence that your global operations remain compliant from end to end.
Whether it’s UK compliance, partial exemption, or international transactions, our recruitment sector expertise ensures you’re not just following the rules — you’re making them work for your business.
How we can help
Protect yourself against VAT
As a self-assessed tax, you will also know that it is your responsibility to get it right first time. And it is an essential part of running your business, whether it is located in the UK, elsewhere in the European Union or even if you are based outside of the EU but want to trade within its borders.
This is where we can help. Our team of VAT specialists have a long standing reputation in dealing with a wide range of VAT issues in the recruitment sector. It is our job to keep you fully informed of changes in legislation as well as helping you navigate through the complex web of rules and regulations.
We will also make sure you have the correct compliance procedures in place to ensure you are maximising your cash flow and are not exposed to errors and unnecessary penalties.
When to
Enlist our help with Value Added Tax
There are some aspects to VAT accounting that do not require the involvement of specialists. Equally, there are many situations that do. The following is a list of VAT situations where experience tells that things can easily go wrong and we recommend our assistance should be enlisted:
Completion of your VAT returns for you, when we can monitor long and short-term trends to make any proper disclosures to HMRC to minimise the risk of penalties and identify and pre-empt situations that may cause HMRC to raise an enquiry into your VAT affairs.
Reviewing assessments and surcharges issued by HMRC against you to identify where the assessment/ surcharge can be challenged.
Consultancy and planning in relation to:
• new ventures
• international trading
• property deals
• seeking formal Rulings
• disputes with HMRC
• overseas business
• partial exemption methods
• corporate finance
• group restructuring
VAT reviews, health checks and due diligence exercises either on your own VAT affairs or those of targets you are thinking of acquiring to protect you against any nasty surprises.
Dealing with most VAT registrations and deregistrations, in particular those in relation to:
• intentions to trade
• late registrations
• retrospective (back-dated) registrations
• property businesses, particularly involving the option to tax partially exempt businesses
• VAT groups
• non-resident businesses
Subject to your instructions, we can deal with or attend VAT inspections by HMRC, pre-inspection briefings and post- inspection debriefs.
Advising in relation to dispute or litigation against HMRC, including:
• reconsiderations
• negotiations
• appeals
• instructions for Counsel
Where your recruitment business includes any international aspects, we use the local knowledge and expertise of the other member firms of UHY, our international network, which are located in major business centres throughout the world.
Do we sound like your kind of accountants?
Call us, or send us an email to arrange your free Business Review.
There’s no obligation, just a great opportunity for you to find out how we can add value to your business and help you achieve your goals.
Values Added Tax FAQs
VAT (Value Added Tax) is a tax on most goods and services. Recruitment agencies typically charge VAT on their supply of workers or contractors — unless an exemption applies, such as under the nursing agencies’ concession. Understanding how VAT applies to your service types is key for compliance.
There are three main VAT rates in the UK:
– Standard rate (20%) – applies to most goods and services, including most recruitment supplies.
– Reduced rate (5%) – applies to specific goods/services like home energy or certain health products.
– Zero rate (0%) – applies to things like books, children’s clothing, and most exports.
Some services are also VAT exempt, such as certain healthcare placements. It’s essential to understand which rate (or exemption) applies to your recruitment services — and we can help you get that right.
If your taxable turnover exceeds the VAT registration threshold (currently £90,000), you must register with HMRC. Voluntary registration can also be beneficial — particularly if you incur VAT on costs. We can help you decide if, when, and how to register.
If you’re waiting for your VAT number after registering, you can issue invoices — but you must not show VAT or describe the invoice as a VAT invoice. Once you receive your VAT number, you can reissue those invoices with the correct VAT amount and number included.
Not always. Most recruitment services are VATable, but some — especially in the healthcare sector — may qualify for exemption. For example, if you place nursing or care staff under the correct conditions, you may not need to charge VAT. Each scenario needs to be assessed carefully.
Yes — but only where you’re making VATable supplies. If your services are VAT-exempt (e.g. placements into hospitals or care homes), you may not be able to reclaim VAT on related expenses like umbrella company fees. This is known as partial exemption, and it requires careful handling.
Mistakes often include misapplying exemptions, relying on incorrect advice from clients, reclaiming VAT on disallowed costs, or mishandling cross-border services. These errors can lead to HMRC penalties or profit erosion. Specialist advice helps you get it right from the outset.
You must keep clear and accurate records of all VAT invoices, contracts, expense claims, and VAT returns. HMRC requires records to be kept for at least six years. Good recordkeeping supports your compliance and is essential during HMRC audits or inspections.
Outsourcing VAT compliance to specialists ensures your VAT returns are accurate, exemptions are applied correctly, and errors are avoided. It also frees up your time and gives you access to industry-specific insight, especially useful in sectors like healthcare or international recruitment.
VAT treatment depends on where your client is based and the nature of the service. For B2B supplies outside the UK, the “place of supply” rules often mean no UK VAT is charged — but the rules vary by jurisdiction. We can advise on correct treatment and documentation.
If you’re placing contractors abroad, you may trigger VAT obligations in the client’s country. This could include local VAT registration or reverse charge arrangements. Through our BOKS International network, we provide access to local VAT experts to ensure you stay compliant wherever you operate.
