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HMRC internal manual

VAT Insurance

Insurance underwritten at Lloyd’s of London: the Lloyd’s VAT arrangements (‘LVA’)

Because of the unique nature of the Lloyd’s insurance market, we have agreed special VAT accounting arrangements for use by the various market participants. This agreement is known as the Lloyd’s VAT Arrangements (‘LVA’) has been published on the Lloyd’s web-site. 

A copy can also be obtained from the indirect tax specialist whose User Interest is shown on Electronic Folder (EF) for the Corporation Of Lloyd’s VAT registration.

As with any working document, the LVA is reviewed and updated from time to time.

Lloyd’s special exemption arrangements

As explained elsewhere in VATINS4000, certain participants at Lloyd’s can use the criteria set out in the LVA for their special partial exemption method (PESM). However all proposals must be submitted to HMRC for approval. More detailed guidance on the application of partial exemption within the Lloyd’s market can be found in PE5700. This provides information relating to the nature of the services/apportionment methods. Also contained within this part of the guidance is an example PESM template covering the commonly found activities of the different types of entity.

Lloyd’s transactions and their VAT treatment

There are many transactions within Lloyd’s that create supplies for VAT purposes. VATINS4000 details the various bodies and their treatment for VAT purposes.