 Insurance comparator website wins case
The owner of Auto Trader has just won its tribunal case that commission paid to it by an insurance agent should be exempt: The Auto Trader website had a “click here for quote” button which took punters to a co-branded page of the website where they could get quotes and buy car insurance. Auto Trader earned commission on each sale of insurance via its website.
HMRC claimed that the taxpayer was simply providing advertising on its website and therefore the commission it earned should be subject to VAT. The tribunal, in a departure from a similar case last year about commission earned on an insurance comparator website, ruled that Auto Trader was acting as an insurance intermediary and its commission was therefore VAT exempt.
HMRC have long maintained that comparator websites provide advertising rather than act as ‘electronic’ insurance or finance agents. With increasing numbers of people using websites to purchase products including mortgages and insurance, the issue is becoming of greater importance as HMRC’s view makes web-based ‘agents’ more expensive (in VAT terms) than traditional financial or insurance agents. The issue is likely to be resolved on appeal to the higher courts.
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