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HMRC internal manual

VAT Partial Exemption Guidance

From
HM Revenue & Customs
Updated
, see all updates

Guidance for specific trade sectors: Lloyd's VAT arrangements: registration

The following entities may register in their own right to account for VAT on their Lloyd’s insurance market activities, subject to a requirement or entitlement to register:

  • Syndicates (a syndicate is an unincorporated association of the participating members)
  • Managing agents
  • Members’ agents
  • Lloyd’s advisors
  • Mixed agents
  • Corporate members* (see below)

The following members may register in their own right to account for VAT on activities other than insurance underwriting, subject to a requirement or entitlement to register for VAT:

  • Corporate members** (see below)
  • Natural members

Unless HM Revenue & Customs have approved an application to render monthly returns, all registrations covered by these arrangements will render VAT returns on calendar quarters (stagger 1), that is March/June/Sept/Dec.

  • A corporate member that has 100% of the underwriting capacity of a syndicate will be required to cancel the VAT registration of the syndicate as all the economic activities, including underwriting activities, are to be accounted for under the VAT registration of the corporate member. However, see also paragraph 3.5 in relation to corporate members that are part of groups of companies.

** Whether or not a corporate member is required or permitted to register in its own right, a corporate member is eligible for membership of a VAT group, subject to the normal VAT grouping requirements being met. In the case where a corporate member has 100% of the underwriting capacity of a syndicate, and the VAT registration of the syndicate must be cancelled, the syndicate activities may be accounted for either under a single registration for the corporate member or under the registration of a VAT group of which it is a member.

Syndicates that are underwriting in the year 2000 or future years of account are entitled to register for VAT provided they do not write wholly EU business.

Syndicates that do not have a successor year of account at 31 December 1999 (that will not be underwriting for the 2000 year of account) will continue to be dealt with via the VAT registration of the managing agents. Subsequent to the 1999 year of account, syndicates that do not have a successor year of account can continue to be registered and will recover input tax at an average recovery rate calculated from the previous 3 years’ underwriting premiums. For example, a syndicate that does not have a successor year of account to 2000 will have an average recovery rate based on the aggregate value of all premiums for the period from 1 January 1998 to 31 December 2000.