Charged VAT on build block insurance

[argolis]

Hi,

Up until this year, our management agency (for an apartment) have not charged us VAT on the annual block insurance premium. For background, we're in a small group of apartments that each deal directly with the agency, without a management company in between. The agency issues us quarterly service charges and then annual invoice for nominal ground rent and insurance separately.

They claim that they recently consulted tax advisors who said that they should be charging us VAT on our block insurance, so our fees are going up by about 150 euro.

A Revenue webpage says that insurers, reissuers and brokers are exempt from charging VAT but management agencies aren't covered by those terms, unless they could be considered insurance "agents" so I don't know if that's what they are here.

INSURANCE SERVICES (Insurance and reinsurance services)

vat rate relating to INSURANCE SERVICES (Insurance and reinsurance services)

www.revenue.ie

Does anyone know if management agencies adding VAT to insurance premiums is correct?

Thanks

 

[Dave Vanian]

I'd guess that the agent is using an insurance broker. While the broker wouldn't charge VAT if they're getting paid by commission, the agent would charge VAT because they're not the ones arranging the insurance. They're charging a fee + VAT for dealing with the broker and passing on the correspondence to you. As yours seems to be a small development, you could ask to deal directly with the insurance broker.