VAT treatment of matchmaking services provided to non-EU customers

The business provided an exclusive matchmaking service to clients in many countries. The owners argued that no VAT should be charged on fees to non-EU customers because their offering qualified as ‘consultancy services’ and ‘the provision of information’ under VATA1994 Sch 4A para 16(d). If a service falls within para 16 the place of supply for B2C services is where the customer is based if they live outside the EU and no UK VAT is charged. The usual place of supply for business-to-consumer (B2C) services is where the supplier is based - the UK in the case of the taxpayer.

A client could choose one of two options:

• Club service – this would guarantee at least eight introductions to potential partners in a 12-month period but only using people from the business’s database – the cost was £15 000 plus VAT. A lot of work was carried out...