Special considerations for certain registrations: Lloyd's insurance market
Lloyd’s of London is an insurance market rather than an insurer in its own right. The Corporation of Lloyd’s provides facilities for members to transact their insurance underwriting. This market is very complex but the more important entities which feature in it are as follows.
Members (sometimes referred to as ‘Names’) underwrite insurance policies at Lloyd’s under which they assume several liability (that is, each member is liable to pay his own share but not others’ shares). Members can be individuals, Scottish Limited Partnerships or limited liability companies.
A Member, or group of Members, at Lloyd’s on whose behalf a Managing Agent accepts insurances.
Administer the affairs of underwriting Members at Lloyd’s and introduce prospective Members to a Lloyd’s syndicate.
Underwriting agents, responsible for managing/administering one or more syndicates. A Managing Agent may also act as a Member’s Agent, including for those Members in the syndicates for which he acts as Managing Agent.
We have agreed special VAT accounting arrangements for the Lloyd’s insurance market.
Syndicates with one member
Where a syndicate has only one member, which in practice only occurs with a corporate member, the syndicate cannot itself be registered. In this circumstance, the corporate member must be registered and all syndicate business accounted for under its registration. Where the corporate member is covered by a group VAT registration, the group registration is to be used.
Syndicates with two or more members
Where a syndicate has two or more members, it is the syndicate rather than the member which is registered for VAT as the taxable person for all syndicate transactions. This is because the syndicate is considered to be an unincorporated body of persons, with any changes in its composition being ignored.
Where there is a syndicate registration, a Lloyd’s member, whether corporate or natural, can also have its own registration in relation to non-syndicate activities. Syndicate activities cannot, however, be dealt with through that registration.
Managing Agents and Members’ Agents
Managing and Members’ Agents may be VAT-registered in their own right and their supplies are those of an insurance agent.
Please refer to VATINS for more information on the Lloyd’s insurance market. (External users can find the guidance at http://www.hmrc.gov.uk/manuals/vatinsmanual/index.htm). In cases of doubt or difficulty please consult the Deductions and Financial Services policy team.