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Tax Victory for Price Comparison Websites

Most of us have read about a dispute occurring between Her Majesty’s Revenue and Customs and various businesses at one time or another with regard to VAT.  One particular case I remember involved Jaffa Cakes and whether they could be classed as a biscuit or a cake.  One large Jaffa Cake demonstration later and the company won its argument.

I have since read about another company victory involving two companies who had set up price comparison websites.  Apparently they thought that since they were providing recommendations and a service as an insurance intermediary, they did not need to register to pay or claim VAT on their income and outgoings.

But apparently HMRC thought differently, and after an investigation the companies were told they did have to register for VAT after all.  However this is where the story gets particularly interesting, as the companies concerned decided they would appeal against what they saw as a bad decision.

I have read the details of the appeal and it would seem that the companies were indeed correct to do so, because the Chancery Division has agreed with them on the evidence supplied.  So in this case the companies have won and they are now no longer required to register or pay for VAT.  No doubt the HMRC are disappointed at the decision, but it does show I think that they do not always reach the right decision.

If you own a business and you have any questions or concerns about VAT in any way, don’t hesitate to contact our experts here at St Matthew to get more advice about your situation.  Regardless of whether you are already registered or you are thinking of doing so, we can provide the assistance you need.


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