HMRC must decide soon on whether to appeal over VAT

HM Revenue and Customs (HMRC) has until next Thursday to decide whether to continue its fight to make aggregators pay VAT.

The Court of Appeal ruled last month that non-brokers providing online insurance introductory services are exempt from VAT.

The decision was in favour of Trader Media Group and Insurancewide.com. Insurancewide was one of the first insurance price-comparison sites; it has gone out of business because of the costs involved in fighting the case.

Deloitte director of indirect tax David Fownes, who represented Trader Media, said HMRC would have to decide early next week whether to submit a petition to the Supreme Court for an appeal case to be heard. The Supreme Court will then decide whether the case should go ahead.

Aggregators are watching events closely: if HMRC eventually wins its battle, it could lead to businesses facing a VAT clampdown.

A HMRC spokesman said it is still considering its position regarding the Court of Appeal decision, and will be publishing a brief shortly.