E-Service - Minimal Human Intervention

We are a business located outside the UK which provides an online directory to UK (and international) therapists. We charge a monthly subscription fee to therapists to allow them to advertise their services by creating a profile which covers the type of service they are able to offer as well as other key information. Users are able to access the directory for no charge. The business undertakes extensive checks on the therapists to ensure they are qualified and will advise on the creation of profiles and edit the profiles to ensure they are suitable. Therapists whose credentials are manually verified by staff then pay a monthly fee to remain listed. Many of the therapists are not UK VAT registered, so the business does not treat these as a B2B supply of advertising. The HMRC guidance (VAT rules for supplies of digital services to consumers) makes the point that “It’s your decision whether to accept alternative evidence that the customer is in business and your customer cannot ask you to treat a supply as business-to-business if they have not given a valid VAT registration number”. Our question is whether the supply of advertising is considered an electronically supplied service (e-service). In the guidance an e-service includes “advertising space on a website” which at first sight appears to be similar to the service provided by our business. However, the definition of an e-service is one “… delivered over the internet, or an electronic network, where there’s minimal or no human intervention”. It seems that in this case each time a therapist subscribes to the directory there is human intervention in the form of manually checking therapists’ credentials. Upon request staff can also assist in the creation and editing of therapist profiles. Therefore this is more than minimal human intervention and therefore cannot be an e-service. Do you agree with this analysis?

Hi. I would not be able to give a definitive judgement in whether a supply from overseas is deemed as a digital service. The definition of the provision of a digital service is below:  VAT rules for supplies of digital services to consumers   . Thank you .

Thank you for your reply. In the HMRC guidance you refer to, under the definition of Electronically Supplied service it states "This is a fast-changing area. These examples do not give a comprehensive and definitive list of what’s considered to be a digital service. If you’re not sure if your supplies are digital services, contact HMRC". With this in mind, I would be grateful if HMRC could now confirm whether they agree or disagree with the above analysis?