Hastings Wins VAT Recovery Case: FTT Rules in Favor of Insurance Broker

• Hastings Insurance Services Limited provided insurance broking services to Advantage Insurance Company Limited, a Gibraltar insurer.
• Under EU and UK law, insurance transactions are VAT exempt, but Article 169(c) of the EU Principal VAT Directive allows input tax recovery if services are provided to a customer outside the EU.
• Hastings claimed input tax recovery from HMRC for services provided to Advantage, arguing that the 2019 amendment to the UK Value Added Tax (Input Tax) (Specified Supplies) Order 1999 was incompatible with the PVD.
• The FTT ruled in favor of Hastings, finding that “customer” in Article 169(c) refers to Hastings’ customer, Advantage, not the final customer, the UK policyholder.
• The FTT also found that Article 169(c) is unconditional and has direct effect, allowing input tax recovery for the pre-Brexit period.
• For the post-Brexit period, the FTT held that Article 169(c) continued to have direct effect under the EU (Withdrawal) Act 2018, as it was “of a kind” with Article 168, which had previously been held to have direct effect.

Source: taxscape.deloitte.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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