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HMRC internal manual

VAT Insurance

Services of an insurance intermediary: Introductory services: Borderline between advice and introductory services

Intermediaries can receive income in the form of either fees or commission from advising clients, both initially and on a regular basis, about the best insurance opportunities for them and intermediating between the client and insurers to conclude contracts.

Fees or commission for advice only services are always taxable. Remuneration for intermediary services may benefit from the VAT exemption if the intermediary brings together parties to an exempt insurance contract. In this case remuneration is often collected by the intermediary from the insurance premium and referred to as commission. It can be an initial amount or ongoing trail commission. Remuneration can also, however, be in the form of fees paid by the client to the intermediary for introducing them to an insurance contract and again no VAT is chargeable on such fees.