Product providers are set to escape paying VAT on their medical underwriting budgets over the next f...
Product providers are set to escape paying VAT on their medical underwriting budgets over the next few years, saving the industry up to £100m.
The news came after MorganAsh's recent court case win against Her Majesty's Revenue and Customs (HMRC), where the court concluded that the firm did not have to pay VAT.
The case considered whether medical services relating to insurance transactions could be exempt under the VAT exemption for insurance.
The tribunal decided the service should be free from VAT under UK legislation but not the EU insurance exemption.
Commenting on the outcome, Jonathan French, ABI spokes-man, said: "This is about a service and whether it can be categorised in insurance underwriting.
"We understand the HMRC won't be appealing against the decision. This is good news for both the insurers and the customers as it means that the cost for the foreseeable future won't increase by 17.5%," he added.
