Is there Vat on insurance?

Discussion in 'Accounts & Finance' started by gavin876, Sep 12, 2008.

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  1. gavin876

    gavin876 UKBF Newcomer

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    Hi all....Just putting my insurance costs through the books..Is there any VAT on insurance?..whats the 5% insurance tax?..sorry if there stupid questions :cool:
     
    Posted: Sep 12, 2008 By: gavin876 Member since: Jul 3, 2008
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  2. crossdaz

    crossdaz Guest

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    No VAT just Insurance Premium Tax
     
    Posted: Sep 12, 2008 By: crossdaz Member since: Jan 1, 1970
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  3. Fernhurst Solutions Ltd

    Fernhurst Solutions Ltd Contributor

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    Insurance is exempt from VAT, and as such should be coded as T2 ..... on Sage at least :D
     
    Posted: Sep 12, 2008 By: Fernhurst Solutions Ltd Member since: Jul 18, 2007
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  4. gavin876

    gavin876 UKBF Newcomer

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    Hi..

    Im trying to put it through using kashflow and it asks the vat amount..Do i just set this to 5% and claim it back or is insurance tax not like vat?...i hate doing the books!.:(
     
    Posted: Sep 12, 2008 By: gavin876 Member since: Jul 3, 2008
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  5. dp0848

    dp0848 Contributor

    2,593 1,018
    No, don't do that. Just put 0.00 in the VAT box. You can't claim back the insurance premium tax!
     
    Posted: Sep 12, 2008 By: dp0848 Member since: May 14, 2008
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  6. ARK

    ARK Contributor

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    hi Gavin, you can't claim back the insurance premium tax im afraid
     
    Posted: Sep 12, 2008 By: ARK Member since: Sep 2, 2008
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  7. David Griffiths

    David Griffiths Verified Business ✔️
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    Insurance is not always exempt from VAT.

    If the invoice is from the insurance company it will show insurance premium tax (IPT) and it will be VAT exempt.

    However, if the insurance is recharged to you by the policy holder, and the policy holder is VAT registered, then they must charge you VAT (but not IPT). This applies where either a block policy is held or if the policy holder doesn't charge you the exact premium charged to it.

    Some typical cases

    A removals company has a block policy for insurance on moves, but charges you a fee for the cover - that's taxable

    Your landlord pays insurance for the entire property, and charges you a proportion for one unit in the block - taxable

    The landlord pays the insurance for your property and charges you the same amount - exempt

    In this regard it's very much like postage and MOT costs. I think that you can safely say that if there's IPT correctly shown on the invoice then the insurance will be exempt
     
    Posted: Sep 13, 2008 By: David Griffiths Member since: Jun 21, 2008
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  8. mcarey

    mcarey UKBF Newcomer

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    "Hi all....Just putting my insurance costs through the books..Is there any VAT on insurance?.." ....Just to clarifty this on one of my jobs i have come across insurance statements "professional insurance am talking about" they charge 17.5% VAT, let say your total insurance cost if 139, on the statement it shows net 118.30 and vat 20.70. Does this mean I am right in saying you can claim the VAT on this??
     
    Posted: Sep 14, 2008 By: mcarey Member since: Aug 5, 2008
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  9. Anna Chandley

    Anna Chandley Contributor

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    Yes, you can claim this back as this is VAT not IPT.
     
    Posted: Sep 14, 2008 By: Anna Chandley Member since: Jun 2, 2008
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