Insurance Flashcards
What is the significance of the Insurancewide.com case?
IW operated a website where customers were provided with a comparison service for insurance cover from various insurers
It received commission from whom it introduced clients. It treated its supplies as exempt, did not register for VAT.
HMRC issued a ruling that the company was not an intermediary.
It was held that it was not necessary for the introducer to have a direct relationship with both the customer and the insurer as long as they are part of the chain of introduction.
What is the significance of the Trader Media Group case?
The COA accepted that the exemption will apply to internet services where the provider is doing more than acting as a mere conduit through which a potential customer is passed to the website of an insurance broker.
E.g. click through link, proactive part of putting arrangements in place - negotiating a special rate or assessing customers’ requirements and recommending an insurer
Describe the case of Intelligent Money v HMRC [2022]
IML was providing SIPPs (self invested pension plans) and charged fees to clients. It acted as an administrator.
The amounts paid out under the SIPP came from the member’s own funds and the arrangement could not amount to an insurance arrangement for VAT purposes, even if treated as so for legal purposes.
For VAT, as there was no element of risk in return for premiums, it was effectively an investment product and not insurance.
What is the significance of the card protection plan case for insurers?
The insurance exemption is not restricted to insurers.
CPP was providing insurance services for lost cards and ancillary administration services. It was not an insurer by definition.
If there is a premium paid to indemnify against a risk, there is a supply of insurance.
Describe the case of Peugeot Motor Co Plc
Peugeot sold cars to the public through dealers within the same VAT group or through franchised dealers or finance houses
Peugeot used various promotion schemes in which the user received motor insurance from an insurance company for an additional payment, the insurance company was paid by Peugeot
The court held that Peugeot made an insurance-related supply, but that this formed a single supply with the motor car and the insurance element was ancillary
Describe the case of Arthur Andersen & Co
CJEU held that back office activities to an insurance company do not constitute the performance of services relating to insurance transactions.
Andersen issued, managed and cancelled policies. It took decisions that bound the insurer to enter into insurance policies
To qualify for the exemption, it needed to have complete freedom as to the choice of insurer for its clients and introduced prospective clients to that insurer.
AA’s services were taxable at the standard rate
Describe the case of Westinsure
The company was formed in 2000 to provide instructions and improve terms to brokers who subscribe to its services
Its income comes from subscriptions and commissions paid by insurers and issued through its subscribers
It enabled small brokers to group together in alliance to secure better terms for their own commissions and for clients’ premiums
HMRC decided that supplies to insurance companies, remunerated by omissions were not exempt
Services provided to clients were not exempt and more akin to back office services
What is the significance of the Black Cabs Services Ltd case?
The FTT found that where Hackney cabs were leased to drivers and they opted for an insurance add on, there were two separate supplies
The typical consumer would think they were receiving two supplies
What is the WTGIL case?
Insurance provided cheaper to younger drivers who agreed to have a black box, fitted to a car, in return for cheaper insurance, was a single supply of insurance
