The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of how to apportion contracts and using the de minimis provisions under which a business can avoid the requirement to account for IPT if they meet the conditions outlined below. This note should be read in conjunction with the following guidance notes:
If an insurer writes a policy that has elements of risk which are liable to IPT at that standard and / or higher rate and / or are exempt from IPT then it will be required to calculate the amount of the premium which relates to each element of the risk. Please see the IPT – exemptions and risk management and IPT – supplies liable to the higher rate guidance notes for more information.
Please note that it is not possible to apportion the fees levied by a taxable intermediary.
HMRC has produced the following table which provides examples of the methods that could be used by an insurer to apportion the premium between the different types of risk. The business will need to be able to provide satisfactory evidence to HMRC that the apportionment used has given a ‘just and reasonable’ result. The method of apportionment used must have some relationship with
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