Wasn’t sure if I should start a new thread or resurrect an old one. I thought however I would be more likely to get a better and more subjective response to this contentious issue with a new thread.

I have a couple of questions regarding VAT on leads. I am aware of this being a can of worms but it would be great if you could help.

Firstly-

  • Any form of finance lead generation where the generator doesn’t have an input in the setting up of any agreement after supplying the lead is VAT eligible. So any lead generation company (with a turn over of £67K+) would have to pay VAT on the sale of leads where they don’t “work preparatory to the completion of a contract"?


Quote from HM Rev & Cust site.

What is an exempt supply of intermediary services?
 brings together a person seeking a financial service with a person who provides a financial service
 stands between the parties to a contract and acts in an intermediary capacity and
 undertakes work preparatory to the completion of a contract for the provision of financial services, whether or not it is completed.
Definition of “work preparatory to the completion of a contract"?

Work preparatory to the completion of a contract refers to work done of a specialised nature. This could include helping to set the terms of the contract or making representations on behalf of a client, but would not include work done of a general nature such as administrative or clerical formalities.
That being the case and assuming affiliate networks don’t “work preparatory to the completion of a contract” then networks who are VAT registered should pay VAT when both buying and selling all leads? I obviously see why it would be advantageous for them to sell without having to add VAT on, as the people buying them maybe be VAT exempt and not able to claim the VAT back, however is this totally legal under current VAT legislation?

Also a much simpler question-

  • Are all IVA/DM service charges eligible for VAT and not exempt under the “financial exemptions”? If this is the case then I assume VAT should be paid on the purchase of all DM/IVA leads (assuming both parties are VAT registered in the UK).


Thanks