This appeal related to the VAT treatment of a payment of  €4m (the payment) received by the appellant from the Italian football club Inter Milan in relation to the transfer of a Portuguese football player to Inter. 

It was HMRC’s position that the appellant supplied services to both Inter and to the player. Under a contract with the player, the appellant was entitled to a fee of 10% of the player’s gross salary from Inter which was €30m. So, output VAT of £438,954 is due on €3m of the payment as this amount was third-party consideration paid by Inter for a supply made by the appellant to the player, which was a supply made in the UK. The appellant argued that all of the payment from Inter (and not just €1m as alleged by HMRC) was consideration for services supplied by it to Inter, and consequently, the place of supply of the services was Italy. Thus, no VAT was due on the payment. 

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