Commentary

V18.114 Taxable intermediaries and their fees

Part V18 Insurance Premium Tax

V18.114 Taxable intermediaries and their fees

V18.114 Taxable intermediaries and their fees

An anti-avoidance measure was also introduced in respect of fees charged after 19 March 1997 to ensure that premiums subject to a higher rate of tax are not split into taxable and non-taxable elements to reduce the tax payable. It provides that in certain circumstances a fee charged by an intermediary, who for the purposes of the legislation is known as a taxable intermediary, is treated as a premium received under an insurance contract and liable to the higher rate.

A fee will be so treated if it is1:

  1.  

    •     a fee charged which is over and above the insurance premium at or about the time when the insurance contract is taken out

  2.  

    •     charged in connection with that contract which is liable in whole or in part to the higher rate

  3.  

    •     charged in connection with an insurance related service

  4.  

    •     charged to the insured

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