Hi,
I have a client that sells insurance to his customers as part of his service - so he invoices say, £10,000 for his service plus £250 for insurance and adds IPT at 6% - so total invoice amount before VAT is £10,265 (the insurance broker then invoices for the cost of the insurance and also passes on the £15 IPT).
Am I right in thinking that VAT should be charged on £10,250? .....a lot of forum posts suggest that only the £10K is Vatable.
Replies (8)
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Be honest ......
Is the reality the client is itemising part of his charge as insurance so that his fees look less than they really are ?
If so, it's not really insurance is it ? It's part of the removal fee and standard rated.
Am I going to bill part of my PII/motor/property insurances to clients and avoid VAT on that part of the bill ? Er - no. I wouldn't be confident that would work.
Late to the party
But I think the insurance element may be exempt but not as an insurance policy. You client can't provide insurance as it's not an insurer, but if he arranges it separately for each client and gathers the information to do so that sounds like the service may be a separate supply of insurance intermediary services. Just another line of defence if you are ever asked!