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Introduction to the sector

The insurance sector is made up of companies that offer risk management in the form of insurance contracts. The basic concept of insurance for the purposes of the VAT exemption is that one party, the insurer, will guarantee payment for an uncertain future event and assume financial risk for that event happening. Meanwhile, another party, the insured or the policyholder, pays a smaller premium to the insurer in exchange for that protection on that uncertain future occurrence. The sector also includes intermediaries, or brokers, who sit between the insurer bearing the risk, and the insured party or policyholder.

This guidance note covers the key areas of consideration within VAT and indirect taxes for the insurance sector. This guidance note will provide a starting point for advisers preparing for a meeting with an insurance client or broker, as well as in-house VAT teams.

Key considerations