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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: Global Market Rate (GMR) / Members’ Agents Rates (MAR)

Global Market Rate (GMR)

The Global Market Recovery rate (GMR) will be calculated on an annual basis for each VAT tax year. During the current VAT tax year, the recoverable amount of non-attributable input VAT incurred in each quarter will be determined by reference to the GMR for the previous tax year. The actual GMR for the current year will be used to determine the annual adjustment for that year.

The GMR will be calculated using the value of all insurance business written in the Lloyd’s market to include:

  • the LPSO calculated gross premium VAT figures, including small pool business and IPT,
  • gross premiums (including IPT) not processed through LPSO for the previous year of account,
  • Records and Amendments section adjustments.

The method of calculating the GMR will be through a procedure agreed between Lloyd’s and HM Revenue & Customs and will be subject to review.

Members’ Agents Rate (MAR)

The Members’ Agents Recovery Rate (MAR) will be calculated on an annual basis for each VAT tax year. During the current VAT tax year, the recoverable amount of non-attributable input VAT incurred in each quarter will be determined by reference to the MAR for the previous year. The actual MAR for the current year will be used in determining the annual adjustment.

The MAR will be calculated using the value of all insurance business written in the Lloyd’s market except for business written by those syndicates all of whose capacity is provided by a single corporate member or by a number of corporate members that belong to the same group. It will include:

  • the LPSO calculated gross premium VAT figures, including small pool business and IPT,
  • gross premiums (including IPT) not processed through LPSO for the previous year of account,
  • Records and Amendments section adjustments.

The method of calculating the MAR will be through a procedure agreed between Lloyd’s and HM Revenue & Customs and will be subject to review.