The issue was whether services provided by the appellant to a number of life assurance companies were exempt from VAT as insurance-related services. The appellant received instructions from life assurance companies to carry out telephone interviews of applicants for life insurance cover for the purpose of determining the applicants’ medical history. The interviews took between 20 and 40 minutes and were carried out by qualified nurses. Following each interview, the appellant prepared a report for submission to the assurance company. It was not disputed that the appellant's services failed to qualify for exemption under art. 13(B)(a) of Directive 77/388, the sixth VAT directive, as that article was interpreted by the European Court of Justice in Staatssecretaris van Financiën v Arthur Andersen & Co (Case C-472/03) [2006] BVC 228 since, within the principles established in that case, the appellant was neither an insurance broker nor an insurance agent. The appellant submitted that, notwithstanding the Community law position, it was an insurance agent for the purposes of item 4 of Grp. 2 of Sch. 9 to the Value Added Tax Act 1994. Also, it provided the services of an ‘insurance intermediary’ on the basis of Note (1) to Grp. 2; it acted in an ‘intermediary capacity’ between the insurance provider and the applicant in accordance with Note (2) to Grp. 2; and its services were related to the provision of insurance according to item 4(a) of Grp. 2.

The commissioners submitted that there was no evidence to suggest that the appellant provided any assistance related to insurance contracts. In the commissioners’ view, the appellant was not an insurance agent within the accepted meaning of that term in the UK or within the meaning in the insurance intermediaries directive; it had no power to bind an insurer and merely acted as a conduit for information between the applicant and the insurer. In response to the appellant's submissions that it provided the services of an insurance intermediary and acted in an intermediary capacity, the commissioners argued that acting as an intermediary involved acting somewhere in the chain of supply of an insurance contract and not simply acting in place of one of the parties to the contract, as the appellant did. The appellant merely provided administrative tasks in the name of the insurer. The commissioners acknowledged that the insurance contracts would not be completed if it was not for the work carried out by the appellant, but submitted that this was insufficient. There must be a close nexus between the service and the insurance contract concerned and such nexus was missing in the present case.

The tribunal allowed the company's appeal.

1. Since the appellant carried out work preparatory to the conclusion of contracts of insurance, that work fell within the scope of art. 2(1)(b) of the insurance intermediaries directive (Dir. 2002/92). It was clear from the wording used in Grp. 2 of Sch. 9, and from Note (1) in particular, that the domestic provisions drew extensively on that directive. In the judgment of the tribunal, the appellant acted as an insurance agent.
2. Note (2) to Grp. 2 of Sch. 9 could be interpreted only as indicating that the appellant was an insurance agent acting in an intermediary capacity.
3. The essential characteristics of the services supplied by the appellant were those related to insurance contracts and as they formed an essential part of the risk assessment process the required nexus between the services and the contract of insurance was evident.
4. The appellant's services were within the exemption in item 4 of Grp. 2 of Sch. 9.

No. 19,777.