Court of Appeal delivers judgment on insurance exemption

22 Apr 2010

In a landmark decision for the insurance industry, the Court of Appeal has held that operators of comparison websites that introduced potential insureds to insurers were acting as insurance agents or brokers providing insurance intermediary services and so qualified for VAT exemption.

Rejecting HMRC’s arguments, the Court held that it is not necessary for a person to have a direct link with either the insured or the insurer in order to benefit from the exemption; it is sufficient for a person to be acting in a chain of intermediaries, so long as that person is providing services which are themselves characteristic of an insurance agent or broker.  In that regard, it is an essential characteristic of an insurance agent or broker that they are engaged in the business of bringing together insurance companies and clients or potential clients.

The Court of Appeal rejected HMRC’s application for a reference to the ECJ.

Valentina Sloane acted for the successful taxpayer Trader Media.

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