VAT on reimbursement of insurance
I have a small client who has a small car selling business. He is VAT registered. As a way to generate some revenue, he has started hiring out some his cars to people who have had their cars written off in car accidents.
As part of the service, he arranges with their insurers to transfer the insurance from their car to the hire car. Often, there is an additional premium to pay to the insurer on this (say £50). He pays this on behalf of the customer. He does this to ease the process and to speed things up.
He then hires the car out.
At the end of the hire period, the customer returns the car and is charged for the hire (whatever it may be, plus VAT). They are also charged for the additional premium which he as paid on their behalf.
My question is, is this premium subject to VAT. Paragraph 4 of HMRC:Notice 701/36 (October 2011) suggests so. BUT, my client doesn't actually sell the insurance preimum, all he does is pay it on their behalf and is reimbursed. I should note that there is no profit element and it is simply an at cost reimbursement.
Thanks in advance and I hope somebody can help me!
- Mortgage Adviser's request 120 4
- CGT on spouse's death 67 1
- Tax relief for networking day out? 378 8
- Payroll software 167 4
- Company UTR numbers 286 6
- Can shareholders lend to their company at interest? 343 9
- Where do Balance Sheet Gains get recognised in CT600? 636 30
- Starting Again 110 1
- Summer house for business only 55 1
- Transfer of property to Limited Company 83 1
- Is cloud accounting software all just pie in the sky 546 18
- New starter not showing on RTI FPS submission (MoneySoft payroll) 118 3
- Tax implication giving money to friend (not family) 110 3
- How do you count your clients 394 4
- Contractor & possible IR35 146 1
- GASDS What's the rule? 107 1
- Proposal to strike off...... 465 9
- Property Expenses 113 3
- Accrued salary unpaid 151 3
- Calling my southern Brothers. 739 15
- Construction CIS LLP Company 588
- Services via intermediaries and new HMRC reporting requirements 576
- LIVE: Budget aftermath webinar 374
- Pensions Regulator 344
- NIC contribution on unremitted income 277
- Government Gateway - VAT 271
- Using the correct forms 259
- SA penalty proposals 243
- RTI - duplicate employee record 229
- Accelerated payment notices 224