The case centred around whether an exclusive matchmaking service was outside the scope of VAT when its services were supplied to customers outside the EU, which involved the disputed £1.7m tax bill.

Gray & Farrar (G&F) ran an exclusive matchmaking business providing services to clients around the world. For the club service, clients signed up to a 12-month period of active membership and would be given up to eight introductions to potential partners from its client base. 

The basic membership cost £15,000 a year, while fees ranged from £25,000 to £140,000 to arrange a match with an appropriate partner from outside the client list.

For VAT purposes, Gray & Farrar treated its service as a supply of consultancy which meant that clients resident outside the EU were not charged UK VAT on fees according to Article 59 of the Principal VAT Directive 2006.