What is Insurance Premium Tax (IPT)?
IPT is a tax imposed by HMRC on general (both personal and commercial) insurance premiums.
There are currently two rates of IPT. The first of these is a standard rate of 6% which applies to general insurances (such as motor, buildings and contents and commercial insurances). A higher rate of 20% currently exists for specific insurances such as travel insurance and mechanical / electrical appliances insurance.
What has changed?
In his budget of this summer (2015), the chancellor announced that from the 1 November 2015, the standard rate at which IPT is charged will increase from 6% to 9.5%.
This will affect all households and businesses in the United Kingdom not currently exempt from IPT.
What does this mean for you in terms of your property insurance and your business insurance?
If you have a policy inception or renewal date on or after 1st November 2015, the increased 9.5% rate of IPT will apply to your policy.