Certainly from advice I have seen based on rulings and counsel’s opinion, lead generation is not VAT exempt and therefore any company selling leads with a turnover of more than £61,000 a year should be registered for and charging VAT.
Regarding the point about contracts stipulating the buyer will owe the VAT, if HM Revenue & Customs later deem it a chargeable supply, I’m not sure this could be enforced, as it is generally established that if VAT is not shown, then the invoice is deemed to be inclusive of any tax charge, the burden therefore falling back on the seller.
On this basis, the purchaser of leads need not be concerned. The issue I would have is if you buy leads from someone who is not required to be VAT registered because their turnover is below £61,000, then you might want to question how big their business is and how experienced they are, because at £75-£100 a lead they would only be selling 600 or so leads a year. I would recommend seeking out a bigger partner who, no doubt, will be charging VAT on their services.
Kevin Cooke
Sales and marketing director, Business Lending Limited
