‘No-Win No-Fee’ U.K. Company Can’t Use Insurance VAT Exemption

A “no-win no-fee” claims management company that helps individuals seek compensation for mis-sold insurance can’t use a tax exemption meant for insurance firms, a U.K. tax court said Monday.

The company, Claims Advisory Group, had helped individuals who had been mis-sold payment protection insurance by financial services firms to win compensation, on a no-win no-fee basis. It argued that a value-added tax exemption for financial services such as insurance should apply, because it only made money from services linked to the sale of insurance policies.

Seeking to establish a precedent, the company sought a ruling from the First-tier Tribunal, which ...