Premium figures
- VAT premium figures for the period from 1 October, 2000 to 31 December, 2000, were sent out at the beginning of January 2001 by the LPSO Technical Services Data and Information section. (If you have not received the premium figures please contact LPSO Technical Services on +44 (0)20 7327 2024.)
- These should be used in determining the amount of input VAT that can be recovered by your Agency when making VAT returns for the period ended 31 March, 2001.
- Following the revision of the Lloyd's VAT arrangements from 1 January, 2000, these figures should also be used by syndicates underwriting for the 2000 year of account when making VAT returns for the period ended 31 March, 2001. For further information on the revised Lloyd's VAT arrangements please refer to Market Bulletin Y2158 dated 3 November, 1999 below.
Reverse charge on imported services
The rates of exchange to be used to convert claims into sterling for the purposes of the imported service charge are as follows:
| Month |
US$ |
CAN$ |
EURO |
AUS$ |
J Yen |
SA Rand |
Swiss F |
| January 2001 |
1.46 |
2.19 |
1.57 |
2.66 |
169.90 |
11.36 |
2.40 |
| February 2001 |
1.44 |
2.21 |
1.57 |
2.75 |
169.17 |
11.14 |
2.42 |
| March 2001 |
1.42 |
2.24 |
1.61 |
2.91 |
178.16 |
11.39 |
2.45 |
VAT incurred on claims from services supplied from within the UK
- Syndicates and managing agents can only recover UK VAT if it arises on a supply that has been made to an underwriter and the policyholder belongs outside the EU.
- As advised in the Market bulletin of 16 January 2001 (ref. Y2465 - see below), an audit by Customs and Excise found that the above condition was not being adhered to. It was agreed that Taxation Department would advise quarterly disallowance rates to be applied by all syndicates and managing agents on VAT on claims amounts and VAT on commissions on recoveries until Customs and Excise are satisfied that procedures are in place for reporting the correct amount of VAT. The disallowance rates for the quarter ended 31 March 2001 have now been agreed with Customs and Excise.
- Syndicates and managing agents must apply the gross disallowance rate of 48.14% to VAT on claims for the quarter ended 31 March 2001 before recovering these amounts the March VAT return. Please note that this disallowance rate should be applied only if positive amounts of VAT on claims are being recovered.
- Where syndicates and managing agents are also recovering VAT amounts on commissions on recoveries (negative VAT on claims amounts), the net disallowance rate of -39.5% must be applied. Therefore, if total VAT on claims including VAT on commissions on recoveries reported by the LPSO is £1000 then a further £395 can be recovered in the VAT return for the March quarter.
If you have any queries regarding the VAT premium figures report then please contact LPSO Technical Services Data and Information section on +44 (0)20 7327 2024. Other queries should be addressed to Harinder Sandhu in Lloyd's Taxation Department on +44 (0)20 7327 5396.
Other information
Lloyd's market bulletins:
