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HMRC internal manual

VAT Partial Exemption Guidance

HM Revenue & Customs
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Guidance for specific trade sectors: Lloyd's VAT arrangements: introduction and scope of the arrangements


This document sets out administrative arrangements for operating VAT within the Lloyd’s market. It was drawn up following an extensive review of the previous Lloyd’s VAT Arrangements, which dated back to 1985 and a period of review and consultation with the Lloyd’s market.

The Lloyd’s VAT Arrangements set out in this document provide guidelines on the VAT registration and recovery treatment of entities operating within the Lloyd’s market. They are intended to set out a minimum framework that HM Revenue & Customs expect to be adopted, together with some methodology for the supporting evidence. However, the VAT methodology that is contained in these arrangements is not intended to be prescriptive or exhaustive, and so each VAT registered entity will have to formulate and agree with HM Revenue & Customs a VAT recovery method that is suitable for its own specific circumstances and activities.

This document records arrangements that came into effect on 1 January 2000, and which have already been communicated to entities in the Lloyd’s market by way of meetings and bulletins. It also records subsequent amendments to those arrangements.

In signing this agreement, HM Revenue & Customs and the Corporation of Lloyd’s underline the desirability and the benefit of the Lloyd’s market’s having a cohesive approach to VAT. However, these arrangements are subject to prevailing VAT law and are therefore without prejudice to the right of any entity to take an appeal to the first-tier Tribunal on a matter of law.

Scope of the arrangements

The arrangements are for the use of the following entities within the Lloyd’s market:

  • Syndicates
  • Managing agents
  • Members’ agents
  • Lloyd’s advisors
  • Mixed agents
  • Corporate members of Lloyd’s
  • Natural members of Lloyd’s.

“Corporate members of Lloyd’s” means the following entities which are members of Lloyd’s:

  • Limited liability companies
  • Scottish Limited Partnerships (SLPs)
  • Limited Liability Partnerships (LLPs)

The arrangements exclude all other entities.


These arrangements are agreed as guidelines setting out a minimum framework for the operation of VAT in the Lloyd’s market from 1 January 2000 onwards as amended by further agreements on 6 January 2004 and 27 November 2006. Except as otherwise specifically stated, everything in these arrangements is to be governed by the VAT legislation in force at the time.