What is Joint Employment?

Joint Employment exists between an employment intermediary and a recruitment agency (or end client). Both parties share employment and liability for compliance with all legal obligations, both the the employee and third parties.

What are the benefits of Joint Employment?

Umbrella Company UK Joint Employment Logo

  • Joint Employment works well across a range of sectors but provides an easy answer for recruitment agencies looking to address the VAT issue in the banking and finance and medical sectors.
  • Where genuine employment exists, there is no VAT chargeable on the cost of employment.
  • It can be a more cost-effective option than a conventional agency-umbrella model.
  • Agencies can employ contractors without having to operate or outsource payroll and HR activities as the umbrella company they enter into Joint Employment with will take care of it.

Who can benefit from VAT exemption?

The main advantage of Joint Employment is that where one employer acts as the payroll provider and pays the employee’s salary, NICs, tax and pension contributions, the reimbursement of the share of these costs by the other employer (the agency) is treated as a disbursement. This can be reimbursed without any requirement to charge or pay VAT.

When does VAT exemption apply?

Joint Employment can be applied to the following industries as they are exempt from VAT:

  • Banking and finance
  • Medical and healthcare
  • Charities

Working with Umbrella Company UK

Umbrella Company UK is a leading umbrella company in the UK and we help thousands of contractors and freelancers get paid in a convenient and timely manner. We provide traditional PAYE umbrella, as well as Joint Employment services.

We are well known in the industry for our commitment and dedication to compliance. As a Professional Passport accredited provider, you will receive free £5 million transfer of debt insurance when you partner with us.

Our experts are ready to provide your consultants and your clients with a leading payroll service. Please give us a call on 01707 669023 or email agency@umbrellacompanyuk.co.uk to arrange a meeting at your office.

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