GIM4270 - Taxation of general insurance: VAT
Insurance and reinsurance transactions, and services related to insurance and reinsurance performed by insurance brokers and insurance agents, are exempt from VAT (VATA94/SCH9 Group 2). In practice, however, most insurance companies make both exempt and taxable supplies and will have partial exemption for VAT purposes. They will not therefore be able to recover all their input tax. A method of ‘attributing’ inputs to outputs will be agreed, thus determining the amount of input tax recoverable. See BIM31500 for further guidance on VAT in general and in particular BIM31540 on partial exemption.
Details of VAT in relation to insurance are given in the VAT Insurance Manual (VATINS), V1-7 Ch 17.