HMRC has confirmed medical reports requested by insurers for protection applications will remain exempt from VAT, saving insurers and consumers approximately £100m a year.
The industry had anticipated for some time HMRC would start to levy VAT on all medical reports, including those requested for underwriting purposes. However, in a recent tribunal case – Morganash Ltd – a ruling was given that medical services which were undertaken for the purpose of enabling a provider of life assurance to decide whether to accept a proposal for a policy would fall within the UK VAT exemption for insurance-related services. HMRC has announced it will not appeal the case and, as a result, insurance-related medical services related to the setting up of contracts, the adm...
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