HMRC have issued the guidance Insurance sector partial exemption framework.
The guidance has been written and compiled jointly by the Association of British Insurers (ABI) and HMRC. It is relevant to those dealing with partial exemption for insurers, including business and HMRC when discussing how partial exemption applies in practice for an insurer.
The guidance is intended to help insurers gain approval for a fair and reasonable partial exemption special method (PESM) with the minimum of cost and delay.
The guidance is neither mandatory nor binding and HMRC will consider whether to approve any PESM that an insurer declares fair and reasonable. HMRC cannot approve a PESM unless accompanied by a declaration. Further information on what is meant by fair and reasonable is provided in Annex 1.
The guidance will be updated regularly by ABI and HMRC jointly to reflect new issues arising and to help ensure consistency of treatment across the insurance industry.
https://www.gov.uk/guidance/insurance-sector-partial-exemption-framework
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