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HMRC internal manual

VAT Insurance

Services of insurance intermediary: Insurance supplied with other goods and services -Legal notes (3)-(5): Liability of the intermediary's commission or fee- disclosure


The intermediary selling the insurance with taxable goods or services will take either a commission (paid by the insurer out of the premium) or an additional fee (a charge bythe intermediary on top of the insurance premium).

These payments (of commission or fee) may only be treated as exempt where the charge is solely for claims handling or the following conditions, known as “relevant requirements”, are met:

  • a document, setting out the amount of the premium and any other amount (connected to the insurance transaction) that the customer is, or has been, required to pay (see VATINS5740) is issued; and
  • this information is disclosed to the customer at or before the time the insurance transaction is entered into.

The document may be an invoice, contract or any other type of written document, and must be given to the customer when the insurance is sold to them (for margin scheme supplies the document must take the form of an invoice).

There are special disclosure requirements for supplies of insurance sold with other services or goods over the Internet, telephone etc. These are detailed in VAT Notice 701/36, Insurance.