Weekly VAT News

Performance Leads Limited: Financial intermediation services – FTT

Performance Leads Limited (PL) offers ‘lead generation’ services to independent financial advisors (IFAs). Individuals seeking financial advice can provide their requirements through PL’s websites, and PL will refer them on to the relevant IFAs, receiving a fee per lead from the IFAs. PL originally took the view that its supplies were standard-rated, but subsequently decided that its supplies were financial intermediation services and VAT exempt, and made a claim to HMRC for overpaid VAT, which HMRC refused. The First-tier Tribunal has held that PL’s supplies were VAT exempt. HMRC argued that PL was providing standard-rated advertising services or acting as an intermediary for non-exempt supplies. The FTT considered that PL was providing intermediary services, acting in an intermediary capacity, as it was bringing together individuals seeking financial services and IFAs, who provided financial services. In the FTT’s view, PL was not engaged in advertising. Nor was it acting as a mere conduit, as it assessed inquirers’ suitability for the IFAs’ services through its websites. The FTT found that “PL therefore was doing enough – in our view, easily enough – to ‘cross the line’ from being a mere conduit or advertiser into being an intermediary introducing the sort of person from whom IFAs might be able to make money”. The FTT allowed PL’s appeal. (Contact: Nahuel Acevedo-Peña)

Conservatory Insulations Northwest Limited: Out of time assessment – FTT

Conservatory Insulations Northwest Limited (CIN) appealed against an assessment made by HMRC as a result of an error correction notice (ECN) filed by CIN. The only issue between the parties was whether the assessment was made within the one-year time limit in which HMRC must make an assessment after evidence of the facts sufficient to justify the assessment comes to their knowledge. The First-tier Tribunal has held that the assessment was out of time. On 15 July 2022, CIN filed an ECN with HMRC, which HMRC acknowledged on the same date by way of an automatically generated email. On 22 May 2023, the ECN was again provided, after a follow-up phone call revealed that HMRC had no record of the ECN. On 27 June 2023, an HMRC officer completed the relevant form to make the assessment, which required the counter-signature of a more senior officer. The senior officer provided the counter-signature on 18 July 2023. On 22 July 2023, HMRC notified the assessment to CIN. HMRC argued that the assessment was made on 27 June 2023, whereas CIN argued that the assessment was not made until it was counter-signed or, alternatively, when it was notified. The FTT held that, because a counter-signature was required and the senior officer did not provide the counter-signature until 18 July 2023, the assessment was made more than one year after HMRC’s receipt of CIN’s ECN. Accordingly, the FTT allowed CIN’s appeal. (Contact: Oliver Jarratt)

Customs rules amended  

The Customs (Miscellaneous Amendments) Regulations 2025, with an accompanying tax information and impact note, amend a number of customs rules. Amendments include simplification of temporary admission and transit procedure declarations, and extending the period in which goods can be kept under temporary admission procedures. The regulations establish an authorisation scheme for certain foreign postal operators allowing them to access simplified declaration arrangements when they carry postal items out of the UK, and reduce the customs information requirements for correspondence entering into and leaving the UK. The regulations also amend customs rules in relation to the application of HMRC’s powers in Northern Ireland and to penalty provisions. The regulations will come into force on 16 July 2025. (Contact: Jeffrie Mann)

Check where an online marketplace seller is established – HMRC guidance

Online marketplace operators are liable for VAT on goods that are located in the UK at the point of sale and sold by an overseas business through their marketplace. On 20 June 2025, HMRC released Check where an online marketplace seller is established, which provides guidance on how online marketplace operators should determine whether sellers are established outside the UK. This guidance also sets out HMRC’s view that marketplace operators must decide for themselves what checks are reasonable and proportionate when determining where a seller is established; reminds online marketplace operators that they should keep records to demonstrate that all reasonable steps have been taken; and provides examples of checks that online marketplace operators may wish to undertake. Examples of checks include checking VAT and Companies House registrations, payment and financial information, IP addresses, and phone numbers. If a marketplace finds indicators that raise doubt as to whether a seller is UK established, HMRC note that further checks should be undertaken. (Contact: William Graham)

CJEU VAT case calendar

On 3 July, the CJEU will deliver judgments in Högkullen on the valuation of intra-group charges, and in Ati-19 and Beach and bar management on the application of penalties. There will also be an Advocate General opinion released in Česká síť on deemed VAT liability for partners.