Some comment on a case involving Hastings Insurance and HMRC for you;
The judgement last week by the Tax tribunal in the case of Hastings Insurance Services Ltd v Revenue and Customs [2025] UKFTT 275 (TC) has significant implications for insurance intermediaries and their ability to recover VAT as well as a major cost to HMRC.
Robin Prince, VAT partner at UK accountants and advisors MHA, explains:
“Following previous unsuccessful litigation in 2016, HMRC introduced new legislation, the’ Offshore looping Regulations’, to limit VAT recovery in such arrangements. Hastings contended that these amendments were incompatible with Article 169(c) of the Principal VAT Directive (“PVD”), which allows VAT deductions for transactions where the customer is established outside the EU.
“This judgment which found in favour of Hastings has significant implications for insurance intermediaries that have faced restricted input tax recovery due to the Offshore Looping Regulations. The tribunal’s conclusion that Article 169(c) PVD has direct effect, even post-Brexit, limits HMRC’s ability to restrict input tax recovery in similar situations and could lead to other taxpayers making claims for refunds.
“The sum available for refunds will depend on each individual insurance companies tax circumstances but we do know that Hastings cited that £16m was at stake for them for the last 4 years so it is clearly a significant amount. HMRC’s impact assessment from when they introduced the legislation in 2018 quoted the tax at stake as being £65m -£100m per year or £250m to £400m for the period.”
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