In WTGIL Ltd v HMRC [2025] EWCA Civ 399, the Court of Appeal (CoA) found that an insurance intermediary providing and fitting driving-monitoring devices was making an exempt supply for VAT purposes.
WTGIL Ltd, trading as ‘Ingenie’, provided a form of motor insurance aimed at drivers aged 17 to 25.
- The insurance involved fitting a device to the driver’s vehicle to record and monitor how the car was being driven. This type of insurance is known as ‘black box’ or ‘telematics’ insurance.
- The devices were supplied and fitted to policyholders’ vehicles by Ingenie.
- Ingenie acted as an insurance intermediary between policyholders and underwriters. Its income on the supplies was the commissions received from the underwriters.
- Ingenie had initially treated the supply of the devices as an exempt supply of insurance, but submitted an Error correction notice to HMRC claiming that the supply of devices was a taxable one for no consideration. As such, input tax totalling £2,084,149 could be Reclaimed.
- HMRC rejected the claim on the basis that the input tax incurred on the devices was directly attributable to an exempt supply of insurance.
- Ingenie Appealed to the First Tier Tribunal (FTT), which found that Ingenie’s supplies were not made for a “non-monetary consideration, namely that of the policyholder entering into a contract of insurance with the underwriter”. The appeal was rejected.
- Ingenie then appealed to the Upper Tribunal (UT). The UT also rejected Ingenie’s appeal on the basis that whilst providing and installing the devices was a supply, it was not made for a consideration.
- Igenie then appealed to the Court of Appeal (CoA).
The case put forward by Ingenie, and ruled upon by the FTT and UT, was that if Ingenie made taxable supplies of services for consideration according to article 2(1) of the Principal VAT Directive (PVD) when it provided and fitted the devices, it would be entitled to deduct input tax under article 168.
Article 2(1) of the PVD states that:
"The following transactions shall be subject to VAT:
(a) the supply of goods for consideration within the territory of a Member State by a taxable person acting as such;
(b) the supply of services for consideration within a Member State by a taxable person acting as such.”
The CoA also considered whether the provision and fitting of the devices was an exempt supply of insurance services, as described in Group 2 of Schedule 9 VATA 1994:
“Item 1: Insurance transactions and reinsurance transactions.
Item 4: The provision by an insurance broker or insurance agent of any of the services of an insurance intermediary in a case in which those services:
(a) are related (whether or not a contract of insurance or reinsurance is finally concluded) to an insurance transaction or a reinsurance transaction; and
(b) are provided by that broker or agent in the course of his acting in an intermediary capacity."
Note 1 then explains what is meant by 'services of an insurance intermediary' and acting 'in an intermediary capacity' in Item 4, as follows:
"(1) For the purposes of Item 4 services are services of an insurance intermediary if they fall within any of the following paragraphs –
(a) the bringing together, with a view to the insurance or reinsurance of risks, of –
(i) persons who are or may be seeking insurance or reinsurance, and
(ii) persons who provide insurance or reinsurance;
(b) the carrying out of work preparatory to the conclusion of contracts of insurance or reinsurance;
(c) the provision of assistance in the administration and performance of such contracts, including the handling of claims;
(d) the collection of premiums.
The CoA found that:
- Ingenie’s supplies fell within (b) as 'the carrying out of work preparatory to the conclusion of contracts of insurance', or alternatively, within (c) as 'the provision of assistance in the administration and performance of such contracts'.
- Ingenie’s supplies were provided to the insurers as well as to the policyholders.
- The supplies of providing and fitting the devices were therefore exempt from VAT.
- As the CoA found that Ingenie’s supplies were exempt from VAT, there was no need to consider whether or not the supplies were received for a consideration.
The appeal was dismissed.
Useful guides on this topic
Correcting VAT errors
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Partial exemption & input VAT
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Input VAT: What constitutes a valid claim (& VAT invoice)?
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