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As the cost of running residential buildings continues to rise, some staffing providers are promoting “joint employment” arrangements as a way to avoid VAT on on-site staff. While this may sound like a welcome saving, the reality is far more complex — and potentially risky. HMRC scrutiny, tribunal criticism and employment law concerns all cast…

As service charge pressures mount, some staffing providers are pushing joint employment schemes as a clever way to avoid VAT on on-site staff costs. But beneath the surface lies a dangerous trap. These arrangements promise savings while exposing clients — and employees — to legal ambiguity, HMRC scrutiny, and financial risk. This article unpacks the myths, the risks, and the real-world consequences of using joint employment as a VAT workaround — and why the safest option is often the simplest.

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Joint employment, also known as co-employment or shared employment, occurs when two or more employers share responsibility for the employment of an employee or group of employees.

In the lead-up to the HMRC’s guidance on the correct application of VAT on residential service charges, and after its release in September 2018, there has been much debate amongst managing agents, landlords/freeholders and providers of on-site staff.