BDO wins High Court battle with HMRC over commission VAT

BDO Stoy Hayward has won a High Court battle against HMRC along with its client Insurancewide.com over VAT on insurance commissions

The appeal ruling means that Insurancewide will not have to pay VAT on internet-based insurance commissions and comes after almost five years of negotiations with the taxman.

There had been a dispute over whether the services provided by Insurancewide were insurance intermediation services or advertising. Commissions paid to insurance agents and brokers are exempt from VAT while advertising businesses are not.

BDO and Insurancewide had argued that the company was being singled out as its competitors were not required to pay VAT on commission.

‘After five long years of dialogue and litigation with the Revenue we have finally achieved justice for our client Insurancewide,’ said Tom Kivlehan, tax partner, at BDO Stoy Hayward. ‘We always felt that HMRC had treated our client unfairly, so we are very pleased with today’s outcome, and believe that common sense has now prevailed.’