VAT due on Landlords’ Rent and Legal Protection Insurance?
As I am frequently out of the country I have a single rental property under full management with a local agent. They previously arranged rent and legal protection cover for me through their block policy rather than as an individual.
As it was getting increasingly expensive I have sourced an alternative cover which is considerably cheaper and apparently equally as good.
I have only been charged Insurance Premium Tax on this, not VAT.
My query is why would my agent have charged VAT on the cover he provided?
I have tried the HMRC website but it’s too complex for me to be certain of my facts.
Any (simple) explanation appreciated.
Thanks
Sue
3 comments on this article
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Member Since June 2013 - Comments: 67
9:58 AM, 12th August 2014, About 12 years ago
Hi Sue,
There are two explanations:
1. The previous cover you had was a warranty based product and therefore there would be no IPT as it isn’t an insurance product
2. It was an insurance based product and your agent was making a margin
Hope this helps
Chris
Member Since July 2013 - Comments: 1434
1:59 PM, 12th August 2014, About 12 years ago
This link http://www.ukbusinessforums.co.uk/threads/is-there-vat-on-insurance.79801/ suggests that your agent was correct.
In summary it says
“If agent arranges your insurance and passes cost on to you, then no VAT;
If agent arranges block insurance and passes your proportion of the cost on to you, then VAT is chargeable.”
Note that this was the 2008 position, but I have no reason to think it has changed.
Comments: 1
9:57 AM, 13th August 2014, About 12 years ago
Thank you both for helping to clarify the situation. It’s one of those questions that, with the benefit of hindsight, I now realise I should have asked the agents. Hopefully there won’t be too many more.