HM Revenue and Customs (HMRC) have issued a Business Brief setting out their interpretation of the European Court of Justice's Arther Andersen judgment and how they intend to implement it into UK law. (See earlier news item relating to the decision of 3 March 2005 concerning the VAT exemption for insurance agents .) This will entail narrowing the scope of the exemption for insurance-related services in Group 2 of Schedule 9 to the VAT Act 1994.
HMRC will issue a consultation document, probably in July 2005, following which there will be a 12-week formal consultation period in which affected parties can make representations. Lloyd's has already had preliminary discussions with HMRC about the VAT liability of Lloyd's market entities, and it is intended that Lloyd's will make representations as part of the formal consultation process.
There will be no change in the scope of the current UK VAT exemption for insurance-related services until UK law has been amended . Businesses may therefore continue to rely on current UK legislation until any change is made, if they wish to do so.
Click here to view the Business Brief (Ref: 11/05) on the HM Revenue and Customs website .
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