General introduction and law: Issues arising from the VAT Legislation: The status of the supplier of the insurance service
Until the CPP judgment, (see VATINS1210 and VATINS7010) a supply of insurance had to be made by a permitted insurer if it was to qualify for exemption. Following the ECJ ruling, however, any person supplying insurance now qualifies for the exemption, as do supplies of insurance transactions effected by block policy holders (see VATINS2300).
This means that you could come across businesses that are (or claim they are) making supplies of exempt insurance even though they are not authorised to do so. You may also come across companies that are in effect supplying exempt insurance but treating it as a standard rated supply.
This is particularly likely to occur in the warranty market where there has been a significant increase in the marketing of guarantees and warranties that are not backed by insurance companies. See VATINS3700 for more information on this.
You should consult VATINS2530 if you have identified an insurer who is not permitted or if a non-permitted business claims to be supplying exempt insurance.