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 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.’

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