Good morning
My client is two companies who are not in a VAT group.
A Ltd makes entirely taxable supplies, B's supplies are almost entirely exempt
Client has suggested that B becomes the contractual employer of any new employees and then loans them to A. B will charge VAT on this as a supply of staff and therefore have some taxable supplies to improve its partial exemption percentage.
It seems rather artificial from an economic reality perspective but I can't see why one should not do this. Any thoughts?
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