Gray & Farrar, a Mayfair-based elite matchmaking agency, has lost its bid at a First Tier Tribunal to avoid VAT due on its past sales.
It aimed to classify itself as a consultancy, meaning clients resident outside the EU would not have been subject to the taxes.
HMRC argued, however, that the “intangible”, “emotional” skills used in matchmaking meant it could not be categorised in this way. Consultancy needed to contain “reasoned, evidence-based intellectual advice”.
The tribunal rejected this definition from HMRC, but also rejected the assertion that the service provided by Gray & Farrar was consultative.
The ruling stated: “It seemed to us that the way in which G&F provides or creates the advice is not part of what it is providing.
“Although it uses intuition and experience to give advice it is not supplying the activity of using intuition and experience, rather it is merely using that as a tool to formulate the advice and to decide on the information it gives to the client.
“The knowledge and calculations of the engineer, her questioning of the client as to the required capacity of the bridge and the text book research of the lawyer are used to make the supply to their respective clients but are not what they supply.”
Gray & Farrar now have the option to appeal the decision, which concerns the tax years 2012 through 2016.
The company charges £15,000 per year for eight introductions to existing members, or £25,000 and up for a bespoke partner search.
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