VATINS5410 | Administration services: insurance mis-selling review

Our current position is that mis-selling review services do not fall within the exemption under any circumstances.

However, until 1 April 2013, we treated mis-selling reviews provided to insurers in connection with insurance based pensions and some other insurance products as exempt (subject to conditions specified in our guidance) on the basis of the Court of Appeal’s decision in the case of Century Life Plc. Taxpayers can rely on our previous treatment to exempt supplies made before 1 April 2013 if they meet the conditions that were set out in our guidance - for details, please see paragraph 10.3 of Notice 701/36 Insurance. However, it is important to be aware that suppliers of services provided in connection with the mis-selling of Payment Protection Insurance (“PPI”) cannot rely on our previous treatment as they do not meet the conditions for exemption that were set out in our guidance. Specifically, PPI mis-selling services are carried out on behalf of consumers, rather than on behalf of insurers.

PPI reviews fall outside the scope of the exemption because:

• PPI reviewers are not insurance intermediaries. They do not intermediate between insurers and their clients. Any intermediation that takes place is likely to be between the consumer and the financial institution that sold the PPI on behalf of the insurer; and

• The services they provide are too remote from insurance transactions to be described as “related” to insurance exemptions for the purpose of the exemption.