In Gray & Farrar International LLP v HMRC [2023] EWCA Civ 121, the Court of Appeal (CoA) found that a dating matchmaking service was not a supply of consultancy for VAT purposes. This meant the services were within the scope of UK VAT when supplied to clients outside of the UK and EU.

  • Gray & Farrar International LLP (Gray & Farrar) operated a high-end matchmaking facility and provided three levels of service: Club, Custom and Bespoke, with fees ranging from £15,000 to £140,000 per annum.
  • The key elements of the service were:
    • The interview and vetting process.
    • The preparation of the brief (of the client's requirements).
    • The matching process.
    • The post-introduction liaison.
  • Gray & Farrar believed the Services fell within the definition of consultancy services and the provision of information under Article 59(c) of the Principal VAT Directive, meaning that they were outside the scope of UK VAT when supplied to customers outside of the UK and EU.
  • HMRC disagreed.
  • Gray & Farrar Appealed to the First Tier Tribunal (FTT), which found in HMRC’s favour, before subsequently appealing to the Upper Tribunal (UT) which overturned the FTT’s decision.
  • HMRC appealed to the Court of Appeal (CoA).

The CoA found that:

  • The question to be determined was whether the services were, or were similar to, the services provided by consultants or consultancy firms, or fell within ‘data processing and the provision of information’.
    • The services provided had to be compared with services ‘principally and habitually’ provided by a consultant.
  • Gray & Farrar’s only contractual obligation was to supply introductions.
    • A typical consumer would regard the provision of introductions to prospective long-term partners as the most important element of the service.
  • To treat the service as comprising two distinct components, the provision of expert consultancy advice and the provision of information, was an error of approach.
    • This did not reflect the economic or commercial reality of the transaction.
  • The service provided by Gray & Farrar was not a service habitually supplied by consultants or consultancy firms giving expert advice to a client.
    • The service was also not either data processing or the supply of information

HMRC’s appeal was allowed.

Useful guides on this topic

Place of supply: Services
The Place Of Supply (POS) of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.

A beginner's guide to VAT
VAT: Where do I start? What is VAT? Who has to register for VAT? What rate should you charge? How do you calculate VAT? When are your VAT filing obligations?

External link

Gray & Farrar International LLP v HMRC [2023] EWCA Civ 121

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