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HMRC internal manual

VAT Insurance

Services of an insurance intermediary: other services excluded from the exemption

In addition to certain expert services, including valuation and inspection services (covered above), there are other services which are specifically excluded from the exemption because they are not considered to be insurance related services. These are set out in Legal Note 7 of Group 2:

*Note (7) Item 4 does not include *-

  1. the supply of any market research, product design, advertising, promotional or similar services; or
  2. the collection, collation and provision of information for use in connection with market research, product design, advertising, promotional or similar activities.


A firm of actuaries designs a new life insurance product. A life insurance company takes up the product, and agrees to pay the actuaries a commission in respect of each policy sold. The actuaries do not take any part in selling the product to customers.

In this example the actuaries are making a supply of product design services, which is a taxable supply since product design is not an insurance related service and is not provided in an intermediary capacity.

Such services may fall to be exempt, however, where they form part of a package of services and are ancillary to a principal supply of related services.

Please see VATINS7000 for more information on insurance supplied with other goods and services.