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HMRC internal manual

VAT Insurance

Services of an insurance intermediary: introductory services: borderline between advertising and introductory services

There may be instances where it is arguable whether services fall within the insurance exemption. This has occurred with some advertising services; for example, whether a service such as mail shotting is an exempt introductory service or a taxable supply of advertising.

The following are indicators that the service may be an exempt supply of insurance related introductory services:

  • intermediary is paid per successful take-up of an insurance policy; and
  • intermediary is targeting its own customer base; and
  • the product or the insurer is endorsed by the intermediary.

If you find it difficult to decide whether a supply is one of promotional/advertising services, or one of introductory services, the three tests in the bullet points above should help you reach your decision. It is important to remember, however, that the tests are only guidelines and should not be used to decide cases where the nature of the supply suggests an opposite interpretation.