Services not provided

NIG underwrote insurance policies that paid for repairs to broken down cars – which would typically be taken to an approved garage that would bill Warranty the company that sold the policies underwritten by NIG.

Insurers’ supplies are exempt from VAT meaning the input tax charged on the repairs could not be recovered. NIG put a two-pronged tax-planning structure into place seeking to provide main and a fall-back arguments that would effectively recover input VAT.

Both parts of the structure relied on the creation of a UK company WHA to provide a claims-handling service for a Gibraltar-based reinsurer of the policies Viscount.

Warranty WHA and Viscount were all part of the same group. The repair services would be provided to WHA by the garages not to the insured car owners. It was argued by NIG that specific legislative provisions would support both...