In Gray & Farrar International LLP: international LLP v HMRC [2019] TC6507, a dating agency was narrowly unable to convince the First Tier Tribunal (FTT) that its full services fell within the definition of consultancy for VAT. As a result it should charge its non-EU customers VAT.

  • The company runs an exclusive matching-making service, attracting clients through advertisements and word of mouth.
  • It claimed to be a consultancy for VAT purposes so that its services fall within the description in Article 59(c) (“para(c)”) of the Principal VAT Directive (and paragraph 16(2)(d) schedule 4A VAT Act 1994).
  • HMRC disagreed with this description, and the taxpayer appealed.

On appeal, the FTT considered that the supply was of 'a single composite service' and according to the authorities, that if a service goes beyond, or has material elements which go beyond, the principal and habitual activities of a consultant, it could not be described as a consultant.

  • Clients were offered three levels of personal service: Club, Custom and Bespoke. 
  • The level of personal service and personal interaction with the client depended on their requirements and extra searches for potential matches outside of the client base.

The FTT disagreed about the outcome:

  • Judge Hellier concluded that the service provided included, in effect, a form of ready-made confidante and went beyond the provision of information and expert advice. As such did not fall within the definition of consultancy.
  • Mrs Wilkins concluded that the supply did fit within the definition, as the material elements of the supply consisted only of the provision of information and expert advice.

As the judge held the casting vote, his decision prevailed and the appeal was dismissed.

Useful links

VAT Place of supply of services (subscriber)
For services made to a non-business customer, UK VAT is charged unless the service is covered by an exception to the general rule.

External links

Gray & Farrar International LLP: international LLP [2019] TC6507

Comments (0)

Rated 0 out of 5 based on 0 voters
There are no comments posted here yet

Leave your comments

  1. Posting comment as a guest.
Rate this post:
Attachments (0 / 3)
Share Your Location