Storage firm selling space & offeriing ince cover

[simpsonite]

Hi all,
My client is a removal & storage business.

As part of the service they provide to customers they offer ince cover for customer possessions in addition to their unit storage space fees.

My client was treating the insurance element as exempt on her invoicing.
I feel this is incorrect as she is not in the business of selling exempt insurance in the same was a broker would.

Anyone able to comment on this .

Thanks,
Simpsonite

[simpsonite]

In addition it did occur to me whether the ince element could be deemed a disbursement and therefore exempt.

However , my client insures the whole storage commercial building . So I feel my client could In no way argue that the ince monies she is billing separately on their sales invoices could be seen as an exempt disbursement.
In addition, would a customer not expect that their possessions are simply covered by the storage firm insurance In any event without having to pay extra in order to ensure cover?!

[Trevor S]

My thoughts are:

• For the reasons you've already stated, I would agree that your client is not making exempt supplies of insurance.

• If your client had acted as some form of "agent" between an insurance company and the end customer, in arranging a policy where the end customer is the named insured party - then the amount your client paid to the insurer on the end customer's behalf could be treated as a disbursement on the invoice issued to the end customer.

• But you say that your client has a single policy with an insurance company. It may be that the insured value on the policy is based on how many end customers take up the insurance option - this would be a justification for making a separate charge, as a higher insured value would attract a higher overall premium. In this case, the VAT liability of the insurance element would follow that of the storage charge - as it's not really a supply to the end customer in its own right.

[simpsonite]

Hi Trevor,
Thanks, your input much appreciated.

simpsonite