Content and fans payment VAT responsibility of ‘Only Fans’ intermediary platform – £11 million liability
The EU’s Advocate General of the Court of Justice has opined the ‘Only Fans’ content sharing platform is liable to collect UK VAT on the entirety of payments made to content ‘creators’ by their ‘fans’.
HMRC is estimating (per Court documents) VAT owed by Only Fans for the four years under consideration could be £11 million.
The owner of Only Fans, Fenix International, was VAT registered in the UK. The Only Fans platform allowed fans to pay for access to content creators’ content – often adult themed. Fenix withheld 20% intermediary fee before passing on the net amount to the creator. It only charged VAT on this deduction as the tax base, and paid this over to HMRC. It considered the creator being responsible for the VAT on the balance.
HMRC challenged this, and referred this to First-tier Tribunal in the UK as to whether Fenix was responsible for collecting VAT on the full payment. The Tribunal asked the Advocate General of the CJEU to rule since the UK at the time was still within the EU VAT regime.
The AG ruled that no element of the service of electronically supplied services provided by online platforms is excluded from the VAT Directive rules. As to Fenix’s argument that that provision transfers the liability for payment of VAT to the intermediary, in breach of the VAT Directive, the Advocate General observes that it is precisely that directive which effected such a transfer, the detailed rules of which are merely determined by the provision in question as regards services supplied electronically.
The Advocate General’s Opinion is not binding on the Court of Justice. It is merely advisory.
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