Lead generation under VAT review?

Angela Faherty

June 10, 2006

Simon Burgess, managing director at britishinsurance.com, admitted lead generation companies might be forced to hike up their prices as a result of possible HM Revenue & Customs changes to the VAT of mortgage leads. He said action from HM Customs & Revenue was to be expected, and argued: “I think it is inconceivable that the tax man will not look at VAT on mortgage leads. The impact could be dramatic and the cost of leads is sure to increase as a result. It might even lead to some companies going under if they are forced to back pay all of the VAT from the last five years or so. Intermediaries will not want to spend more money on leads, but that might be the case.”

However, Nick Chapman, managing director at Leadpoint, said the possible introduction of VAT on mortgage leads would not considerably affect its operations. He added that preliminary talks before Leadpoint set up in the UK dismissed suggestions that VAT would be an issue. “When setting up our company in the UK, we worked very closely with a VAT specialist on this issue. The advice was that VAT is not and will not be charged on mortgage leads, so it is pretty clear-cut from where we stand,” he said. “Even if VAT is introduced, it might have an impact on the buyers side, as they would have to pay for the lead, but it wouldn’t be a big deal from our point of view.”

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