Is matchmaking services “consultancy” for VAT purposes?

The Court of Appeal concluded that an upmarket matchmaking service was making standard rated supplies and  not zero rated supplies, leading to a £1.7m VAT liability.


Gray & Farrar is an exclusive matchmaker service with global clients.  Clients looking for love entered into a 12 month agreement with the aim of obtaining introductions to potential partners from the membership list.  Additional fees of up to £140,000 were applied to arrange a match for a partner not on the membership list.


The place of supply of services for B2C is usually where the supplier is located, a UK business offering a service would charge VAT to clients no matter where the client was located.

The legislation at Article 59(c) of the EU VAT Directive is foundation of this case.  Any services to clients belonging outside the UK would be treated as supplied outside the scope of VAT.  Article 59(c) states “the services of consultants, engineers, consultancy firms, lawyers, accountants and other similar services, as well as data processing and the provision of information”.

The case therefore rested on whether matchmaking services was similar to “consultancy” or similar.

The details of the case

The original assessment was upheld by the FTT in 2019.  HMRC argued that the taxpayer used “intangible skills of intuition” and “understanding of emotions” to identify matches and that this was not consultancy, the FTT agreed the services went beyond consultancy and the special rules for B2C services therefore did not apply.

The FTT concluded that the phrase “services of consultants” is not limited to services provided by members of the liberal professions, but extended to services provided by persons who are “in ordinary usage ‘consultants’ and typically act in an independent manner”

The UT agreed with the taxpayer, accepting that zero rating was possible, that services did not restrict to just the liberal professions and that the FTT had not considered what the predominant supply being made and that the matchmaking services did fall under the definition of consultancy.

The Court of Appeal held that the taxpayer could not claim that its services were a form of expert advice that would qualify for a VAT exemption and that the predominant supply was the matching of potential partners, and the only obligation the taxpayer had was to supply introductions to potential mates, the fees paid were for introductions only.

The Court concluded that the service was not one regularly supplied by consultants or similar, nor was it data processing or supplies of information.


This is one of those cases that hangs on the definition of what a “consultant” actually is/does and just how far a service can be stretched to fit that definition.  On first glance, a matchmaking service is a service, it involves processing information, it requires an element of skill and expertise to arrive at the correct outcome – no different to an Accountant or lawyer – and yet the legislation as drafted clearly had an ideal description of what consultancy meant. 

A Court of Appeal outcome sets precedent, so HMRC may well seek other similar businesses with a view to assessing for historical output tax, and it may also embolden HMRC to consider other services which a business may have determined was “consultancy” but may not now be the case.

Get in touch

If you feel that you are misrepresented or not in agreement with a decision taken by HMRC regarding a business or complex VAT matters, it is worthwhile you seeking advice from a VAT expert.

Here at Rayner Essex we tend to take the view that a business should not automatically accept an assessment from HMRC and should seek an opinion before accepting the outcome or taking a route to challenging the assessment. Our Vat experts have a deep understanding of VAT and have first-hand experience in dealing with HMRC on many VAT matters, knowing the their stance on various issues, and are well placed to advise you as to whether your dispute has any chance of success, and whether it is viable. We have extensive tribunal experience and can represent you for a positive outcome.

Whatever your HMRC query or concern is, our VAT team is always on hand to advise and assist you.

Photo by Tibor Pápai on Unsplash

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