CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. HMRC Outlines VAT Position On Insurance Introductory Services

HMRC Outlines VAT Position On Insurance Introductory Services

by Robin Pilgrim, LawAndTax-News.com, London

25 September 2009


HM Revenue and Customs (HMRC), the UK tax authority, has advised that it will pay out claims for overpaid value added tax (VAT) on insurance introductory services pending a decision by the Court of Appeal in the Insurancewide/Trader Media Group case.

However, HMRC advised in a Revenue and Customs brief issued on September 21 that it will only pay refunds of VAT in respect of insurance introductory services and not introductory services relating to other financial contracts, even in instances were the facts are very similar to the Insurancewide/Trader Media Group case.

Last May, the High Court found that Insurancewide and Trader Media Group’s (TMG) supplies of online introductory services were exempt from VAT. The facts in each case are slightly different; Insurancewide is a comparison website providing "click thru" services to insurer or broker websites, whereas TMG provides "click thru" services from its Auto Trader car auction site to a third party co-branded broker website. Both are paid commission on successful take-up.

At tribunal, Insurancewide lost its appeal as it was found not to be acting as insurance agent at any time, and appealed to the High Court. TMG, however, won its appeal as the tribunal found that its services constituted insurance intermediary services; HMRC appealed the decision to the High Court. Given the similarities in the two cases, the High Court agreed to hear the appeals jointly.

The High Court found that Insurancewide and TMG were insurance intermediaries for the purposes of the VAT exemption, and that an act of introduction with no further involvement in the intermediation of the contract of insurance qualified for exemption as an insurance-related service.

HMRC is of the view that the commissions paid to Insurancewide and TMG are not exempt on the basis that there is not a significant difference between the services they provide and advertising services. Income from the sale of advertising in the UK is usually a "standard-rated" business activity and therefore liable to VAT at the standard rate, currently 15%.


To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »