“According to HM Revenue and Customs (HMRC), the scheme, started in 1998, involved the restructuring of a group engaged in the selling of car warranties. This enabled the VAT on car repair services to be recovered.
Insurers cannot normally recover VAT in such instances, because they do not have to charge VAT on the insurance premiums they receive. In this case, the insurer’s responsibility to repair the cars was devolved to a claims handler, via two Gibraltar reinsurers.”
Well this doesn’t really come as a surprise.
Tax Barrister, Accountant