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Broker managed funds

A broker may, in addition to arranging a life assurance policy between an insurer and the insured party, also provide investment advice to the insurer. The fee for arranging the policy is exempt under VATA 1994, Sch 9, Group 2, Item 4, but the charge for investment services, including 'performance fees' is standard-rated¹.

'Run-off' services

Where an insurer ceases to underwrite insurance, or a particular class of insurance, any additional premiums he receives during the 'run-off' period follow the liability of the original supply. Where the insurer uses an outputs-based partial exemption method, return premiums, ie receipts/payments which relate to adjustments of premiums paid in earlier years, should be disregarded for partial exemption purposes. The insurer may apply for a flat rate of input tax recovery based on the premium income for the last three years of active underwriting.

Third parties who administer the run-off of contracts, ie who provide services of accounting and legal work, the handling and settling of claims and the dealing with premium adjustments,