HM Revenue and Customs Brief 59/09
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Issued 21 September 2009
Revenue & Customs Brief outlining the HMRC position following the High Court
Judgment in Insurancewide/Trader Media Group
This Brief explains the HMRC position following the High Court judgment in
Insurancewide.com Services Ltd and Trader Media Group Ltd (Case ref: CH
/2007/APP/0806 & CH/2008/APP/0435).
The High Court found against HMRC that supplies of insurance introductory
services provided via the internet are exempt from VAT. HMRC has been granted
leave to appeal this decision to the Court of Appeal.
The appeals of Insurancewide (IW) and Trader Media Group (TMG) concern the
VAT liability of internet ‘click thru’ services and whether introductory
services such as this, that involve no intermediation of the contracts
themselves, qualify as exempt insurance intermediary services.
The facts in each case are slightly different; IW is a comparison web-site
providing ‘click thru’ services to insurer or broker web-sites whereas TM
provides ‘click thru’ services from its Auto Trader car auction site to a third
party co-branded broker web-site. Both are paid commission on successful
At tribunal, IW lost its appeal as they were found not to be acting as
insurance agents at any time and appealed to the High Court. On the other hand,
TM won its appeal as the tribunal found that their services constituted
insurance intermediary services and HMRC appealed the decision to the High
Court. Given the similarities in the two cases, the High Court agreed to hear
the appeals jointly.
The High Court hearing took place in March 2009 and the judgment was released
on 15 May. The Court found that IW and TMG were insurance intermediaries for the
purposes of the VAT exemption and an act of introduction with no further
involvement in the intermediation of the contract of insurance qualified for
exemption as an insurance related service.
Subject to the normal rules on capping and unjust enrichment, HMRC will pay
claims for overpaid tax charged on insurance introductory services that follow
the findings of the Court in IW/TMG. HMRC will raise protective recovery
assessments under section 73(2) which will be enforced if HMRC are ultimately
successful in the ongoing litigation.
Please note that HMRC see the judgment as applying to insurance introductory
services only and do not see it as applying to introductory services relating to
other financial contracts even if in other respects they are on ‘all fours’ with
IW/TMG. This is because, for services that fall within items 1 to 4 of the UK
finance exemption, intermediaries are required to be both bringing together the
parties and carrying work preparatory to the conclusion of the contract. A key
aspect of the decision in IW/TMG was the fact that UK VAT insurance law allows
exemption for businesses that are either bringing together the parties or
carrying out work preparatory. Claims will not therefore be paid in respect of
finance introductory services following this judgment.
Details of where to send your claim can be obtained from
VAT Notice 700/45 How to correct VAT errors and make adjustments or claims
from the HM Revenue & Customs Helpline on Tel 0845 010 9000.
HMRC may reject all or part of a claim if repayment would unjustly enrich the
claimant. More details on ‘unjust enrichment’ can be found at part 14 of
VAT Notice 700/45 How to correct VAT errors and make adjustments or claims.
Protective recovery assessments are covered in V1-35
There may be direct tax implications where amounts of over-declared output
tax are repaid to businesses and your attention is drawn to
R&C Brief 14/09 issued previously.
Where you are in any doubt about the correct treatment please contact the
Helpline on Tel 0845 010 9000.
About the Author
© Crown Copyright 2009.
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educational / informational purposes only. Article reproduced by permission of
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updated regularly and may be out of date at time of reading.
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Article Published/Sorted/Amended on Scopulus 2009-09-24 11:15:37 in Tax Articles