Barclays Bank Plc (No. 3)
| Jurisdiction | UK Non-devolved |
| Judgment Date | 25 September 1991 |
| Date | 25 September 1991 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Becker v Finanzamt Münster-Innenstadt (Case 8/81) [1982] ECR 53
Dogbreeders AssociatesVAT (LON/89/313) No. 4295; (1989) 4 BVC 777
Donald Ford (Financial Services)VAT (1987) VATTR 130; (1987) 3 BVC 609
Minster AssociatesVAT (LON/85/326) No. 4580; (1990) 5 BVC 1315
Williams & Glyn's Bank LtdVAT (1974) VATTR 262; (1974) 1 BVC 1021
Yoga for Health Foundation v C & E CommrsVAT (1984) 2 BVC 200,044
Supply of services - Exempt supplies - Making arrangements for the provision of insurance or reinsurance - Services of insurance brokers - Whether mailshot activity qualified for exemption - Value Added Tax Act 1983 schedule 6 group 2Value Added Tax Act 1983, Sch. 6, Grp. 2, item 3.
The issue was whether supplies made in the course of direct marketing or mailshot activity carried out by an insurance broker amounted to the making of arrangements for the provision of any insurance and were therefore exempt supplies.
Barclays Insurance Services Co Ltd ("BISCO") was a member of a group of companies of which the appellant was the representative member. BISCO at all material time carried on the business of an insurance broker, supplying services that qualified for exemption. In 1990 Customs ruled that supplies in the course of direct marketing or mailshot activity did not qualify for exemption. These involved sending out appropriate insurance material which, if accepted, would result in proposal forms being sent to insurance companies or in contact being made with BISCO for further help or advice. In either event, the commission earned from the insurance companies was the same as when insurance was sold in the ordinary way.
The commissioners contended that the disputed services were substantially those of promoting various insurance schemes and introducing potential clients to the schemes which were outsideValue Added Tax Act 1983 schedule 6 group 2item 3 of Grp. 2 and so were properly taxed at the standard rate.
The appellant contended that the disputed services were exempt from VAT as they amounted to the making of arrangements for the provision of insurance under Value Added Tax Act 1983 schedule 6 group 2 item 3.
Held, allowing the company's appeal:
1. There is a presumption that Parliament in enacting the Value Added Tax Act 1983 was complying with the obligations expressed by the sixth directive and in particular art. 13B(a) and there is nothing to rebut that presumption in this case. The statutory words must therefore be construed in the light of art. 13B(a) but were not to be treated as superfluous.
2. The correct interpretation of the words "the making of arrangements for the provision of any insurance …" extended the exemption to services, not in themselves broking, which had a clear connection or nexus with, or were similar to, such broking activities and were carried on by insurance brokers other...
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