Claims handling: Loss assessment and adjusting services supplied with claims handling
Item 4 only allows for the exemption of claims handling services; it specifically excludes from the exemption the expert’s loss adjustment services (valuation and inspection services - see VATINS5520). An expert acting under delegated authority, therefore, is supplying expert services at the standard rate of VAT and (where satisfactory delegated authority is held) exempt claims handling services (see VATINS5540).
If the expert is providing a single composite supply made up of both loss adjusting and claims handling services, and claims handling forms the principal part of that supply, then the other services will be ancillary to the exempt claims handling, and there will be an overall exempt supply.
Whilst there is no limit to the number of providers in the chain of people contributing to the overall claims handling service that can benefit from the VAT exemption, the services provided in each instance would need to be considered in their own right and can only be treated as exempt if the principal supply is one of claims handling services under delegated (or sub-delegated) authority as required.
Please see VATINS7000 for more information on the VAT treatment of insurance-related services supplied with other goods and services.