Smarter Money Limited v Her Majesty's Revenue & Customs

Facts

The appellant, Smarter Money Limited, is a provider of financial services, the majority of whose activities are supervised by the Financial Services Authority. Its business, so far as material to this appeal, concerned mortgage enquiries and the arrangement of second or subsequent finance, described as "secured loans", both operated in a similar way over the internet. The appellant ran several websites, advertised through search engines such as Google, on which prospective customers supplied the details a mortgage broker would require before deciding whether to bid for the business. The websites helped customers find an advisor best placed to assist — of particular importance where a customer had a poor credit history — while relieving brokers of part of the data-gathering they would otherwise undertake and of the need to source all their own new business. The appellant dealt with brokers directly, and also indirectly through the "LEADBAY" website owned by Add Momentum, on which brokers bid for customer profiles, the highest bidder receiving the profile by email and then contacting the customer; remuneration was split between the appellant and Leadbay, whose owner had been granted exemption from VAT for all its activities. The respondent Commissioners determined that these supplies were standard-rated, and the appellant appealed to the Tribunal.