Business

VAT on trade premises insurance?

Had a renewal notice for building insurance for my company.

They have charged me VAT as well as IPT. I thought insurance of this nature was exempt from VAT? I can't find any relevant info on HMRC site, not that i would understand it if i found it :( Can any body enlighten me on this?

auzzie Wed 21/05/08 23:11

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moomintroll1
Thurs 22/05/08
19:26

As far as I am aware, insurance premiums fall outside the scope of VAT. I have never seen VAT charged on any insurance product.

Has VAT been charged on the whole premium, or just on part of it? It may be that there is some additional service the insurer provides which is not classed as insurance, and therefore VAT'ed accordingly.

Skyline D
Sat 31/05/08
10:50

I'd be surprised if there's VAT on the whole sum? Insurance is VAT exempt. Most insurers invoice including a small(ish) service charge though and there will be VAT on that.

If the VAT is on the whole total then I'd guess it's an error and make some enquiries before paying.

auzzie
Sat 31/05/08
17:38

Question Author

Skyline, there is only VAT on £200 of the cost. I have contacted them and they have told me that it is to cover the engineering side of it!!! Still doesn't make sense to me

Skyline D
Sat 21/06/08
16:47

Whatever it is is clearly defined as a "service" rather than an insurance, otherwise it wouldn't have VAT on it.

I have seen such policies before having VAT on them so it's not astonishing. It should be a relatively small part of the total though. If it's £200 out of £500 then it doesn't sound right. If it's £200 out of several thousand pounds though it probably is.

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