IPT08800 - IPT audit assurance: agents of overseas insurers

Prior to 21 July 2008, overseas insurers, including overseas captive insurers were required to appoint a UK-based tax representative, who was jointly and severally liable for any tax due. Changes announced in the Budget 2008 removed this requirement. Overseas insurers who had no fixed establishment in the UK could choose to appoint an EU-based agent, or to deal directly with HMRC (See IPT06300 for further information). As the UK ceased to be a member of the EU from 1 January 2021, appointed agents must now be UK-based.

In the case of captive insurers who appoint an agent, the agent may be the associated UK broker of the local captive manager, or the parent company of the captive; otherwise accountants, solicitors or service companies set up specifically for the task may represent insurers. While the agent may be responsible for the day-to-day IPT affairs of the insurer, they are not liable for any tax that is due. Existing tax representatives remain jointly and severally liable for tax due prior to 21 July 2008, when the Budget 2008 changes took effect.

Assurance

Audits will normally be carried out at the premises of the agent. It is important, therefore, before visiting them to enquire about what records they have and, if they do not have the appropriate records, give them time to obtain whatever you consider necessary.

It is essential to satisfy yourself that a system exists which can and does capture and report all premiums and IPT and that you are able to assure the compliance of the insurer. This might leave only liability and apportionment as the major problems. You should normally expect to deal with the agent to resolve any queries following a visit, although you may also need to liaise with the overseas insurer.