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HMRC internal manual

VAT Insurance

From
HM Revenue & Customs
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Supplies of insurance and related services outside the UK: the Specified Supplies Order

The original Value Added Tax (Input Tax) Specified Supplies Order 1992 (since replaced by the 1999 order) came into effect at the same time as the original Place of Supply of Services Order. The intention of the order was to maintain the right to the recovery of input tax on certain previously zero rated supplies which would otherwise have been lost following the implementation of the Place of Supply of Services Order.

The relevant extract from the order is as follows:

  1. *The supplies described in articles 3 and 4 below are hereby specified for the purposes of 26(2) (c) of the Value Added Tax Act 1994. *
  2. Services-

 

  1. which are supplied to a person who belongs outside the member States;
  2. which are directly linked to the export of goods to a place outside the member states; or
  3. which consist of the provision of intermediary services within the meaning of item 4 of Group 2, or item 5 of Group 5, of Schedule 9 to the Value Added Tax Act 1994 in relation to any transaction specified in paragraph (a) or (b) above,

provided the supply is exempt, or would be exempt if made in the United Kingdom, by virtue of any item of Group 2, or any of items 1 to 6 and item 8 of Group 5, of Schedule 9 to the Value Added Tax Act 1994.

Section 26(2) (c) confers the right to input tax recovery on these ‘specified supplies’.