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VAT: Insurance – Block policies

By Andrew Needham, September 2020

Andrew Needham looks at the VAT consequences of block insurance policies. 

The key characteristics of a ‘block policy’ are that there is a contract between the block policyholder (sometimes called the master policy) and the insurer, which allows the block policyholder to affect insurance cover subject to certain conditions.  

The block policyholder, acting in their own name, procures insurance cover for third parties from the insurer. There is a contractual relationship between the block policyholder and third parties under which the insurance is procured, and the block policyholder stands in place of the insurer in effecting the supply of insurance to the third parties. 

Is FSA registration required?  

Until March 1997, UK law restricted the VAT exemption to businesses authorised (or exempted from being

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