RCB/33/12 Enquiries from the European Commission into the UK's VAT exemption of insurance mis-selling reviews and helpline services
Revenue & Customs Brief, Issue 33. 4 December 2012
Purpose of this Brief
This Brief announces a change in the UK VAT treatment of supplies to insurers of certain mis-selling review services and helpline services following enquiries received from the European Commission (“the Commission”).
Who needs to read this?
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— Insurers
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— Businesses that supply helpline services to insurers
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— Businesses that might supply insurers with mis-selling review services in the future should further reviews be instigated by the regulatory authority.
This Brief does not affect businesses that supply banks and other lenders with Payment Protection Insurance (“PPI”) mis-selling review services. PPI review services have always been subject to VAT and will not, therefore, be impacted by this change.
1.1 Background
The UK currently exempts from VAT mis-selling review services and stand-alone helpline services supplied to insurers by insurance intermediaries, subject to certain conditions being met. This policy is set out in Paragraph 10.3 Notice 701/36 “Insurance” paras 10.3 and 10.4 and in sections VATINS5410 and VATINS5420 of the VAT Insurance guidance manual.
In both