numpty claims department - or is it me?
Discussion
Less than 1% of our customers end up going through their insurance, so dealing with claims departments isn't something I have to do often.
We have just invoiced a claims department for repairs - their authorisation note advised us to collect £175 excess from the driver - who is a private individual and not VAT registered - usually if VAT registered we are asked to collect the entire VAT element from the driver too.
I've prepared the invoice as I always have in the past - showing the pre-vat prices, as quoted, and assuming that the excess the driver has to pay is a gross figure - ie the customer's £175 is actually £148.94+VAT.
The claims department have sent the invoice back stating that by taking £148.94+VAT we have deducted an incorrect excess. They've annotated the invoice suggesting that they expected us to deduct £175+VAT from driver.
I've never seen an excess be stated on an insurance certificate as a pre-VAT sum. I imagine if I'd told the driver that his £175 excess was actually £205 and change he'd have had a fairly abrupt response.
We've not had any query on an invoice set out this way from any other insurer - anyone more in the know about claims handling able to shed any light?
We have just invoiced a claims department for repairs - their authorisation note advised us to collect £175 excess from the driver - who is a private individual and not VAT registered - usually if VAT registered we are asked to collect the entire VAT element from the driver too.
I've prepared the invoice as I always have in the past - showing the pre-vat prices, as quoted, and assuming that the excess the driver has to pay is a gross figure - ie the customer's £175 is actually £148.94+VAT.
The claims department have sent the invoice back stating that by taking £148.94+VAT we have deducted an incorrect excess. They've annotated the invoice suggesting that they expected us to deduct £175+VAT from driver.
I've never seen an excess be stated on an insurance certificate as a pre-VAT sum. I imagine if I'd told the driver that his £175 excess was actually £205 and change he'd have had a fairly abrupt response.
We've not had any query on an invoice set out this way from any other insurer - anyone more in the know about claims handling able to shed any light?
I am not an accountant, but ...
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods... seems to indicate that insurance services are VAT exempt, therefore the end customer's excess is simply a contribution to a VAT exempt service, and therefore outside the scope of VAT.
I might be wrong though
http://www.hmrc.gov.uk/vat/forms-rates/rates/goods... seems to indicate that insurance services are VAT exempt, therefore the end customer's excess is simply a contribution to a VAT exempt service, and therefore outside the scope of VAT.
I might be wrong though
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