Gibraltar Intermediary: VAT Recovery Allowed in Hastings Insurance Case

• Hastings Insurance Services Ltd, a UK company, provided services to Advantage Insurance Company Limited, a Gibraltar company.
• Advantage then provided insurance to UK customers.
• Hastings claimed input VAT recovery on its supplies to Advantage, as the PVD allowed recovery for insurance services provided to customers outside the EU.
• HMRC sought to enforce the Offshore Looping Regulations, which were enacted to block perceived avoidance.
• Hastings argued that the Offshore Looping Regulations were incompatible with the PVD and thus ineffective.
• HMRC argued that Hastings’ customer was not Advantage, but the ultimate UK recipients of the insurance services.
• The FTT ruled that the Offshore Looping Regulations were incompatible with the PVD and therefore ineffective.
• The FTT concluded that the PVD had direct effect and continued to do so following Brexit.
• The FTT found that the PVD specifically referred to “customer”, implying that the location of the next party in the supply chain was the significant factor rather than the location of the end user.
• The FTT concluded that the arrangements concerned did not amount to avoidance.

Source: claritaxnews.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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