Hi - I have a client who rents his premises and the landlord pays for the buildings insurance direct and then recharges my client. The landlord has however, given my client a VAT invoice for the buildings insurance, which shows VAT at 20%.
As far as I am aware, insurance is VAT exempt - are there any circumstances when it would be okay to charge VAT on insurance?
Insurance is only exempt when it is supplied by the insurance company, and so yes it is standard rated when sold by someone else.
It is probable that there is an option to tax on the building, and that the landlord has a single policy for the building and recharge the tenants pro rata, which makes the supply standard rated.
