Client operates in the email marketing sphere acting as a middleman between advertisers (eg: Wowcher, Anglian Windows etc) and distribution list holders. A potential client of his is discussing using his services, but there's a sticking point regarding VAT. The potential client is in the IVA industry and is claiming that Vat Notice 701/49 applies and no VAT should be charged on services supplied. They have referred to the part regarding intermediary services and claimed this applies.
I disagree with them on the basis that my client is not performing "work preparatory to the conclusion of contracts for the provision of those financial services", and also that the services he provides falls into the specifically excluded "advertising, promotional or similar services".
Anyone any experience in this area that thinks differently?
Many thanks.
Replies (2)
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Advertising services
I am inclined to agree with you. Unless the client is directly involved in the negotiation of a financial product his services cannot be exempt.
Standard rated
Your client only supplies intermediary advertising services as this in no way forms any of the preparatory services for the exempt supply then it is taxable.