Insuring charges

The appellant disputed a VAT assessment which relates to insurance charges to tenants of commercial properties.

The issues concerned the appellant’s belief that the insurance charges to tenants of commercial properties - which the company had opted to tax – should have been treated as exempt.

HMRC disagreed that there had been an ‘insurance transaction’ within the meaning of article 13B (a) of the Sixth Directive.

The First-tier Tribunal heard that on all of the properties the appellant had taken out buildings insurance. Under the policy it was the responsibility of the insured to notify any claim.

As the certificate named the appellant as the insured the tenant had no rights of enforcement.

As there was no contract between the appellant and the tenants relating to insurance cover the tribunal said the buildings insurance could not be seen as a supply of insurance to the appellant’s tenants.