What is Insurance Premium Tax (IPT)?
IPT is a tax imposed by HMRC on general (both personal and commercial) insurance premiums.
Prior to 1 June 2017 there were two rates of IPT. The first of these was a standard rate of 10% which applied to general insurances (such as motor, buildings and contents and commercial insurances). A higher rate of 20% existed for specific insurances such as travel insurance.
What has changed?
The UK Government announced on 23 November 2016 that from 1 June 2017 the standard rate at which IPT is charged will increase from 10% to 12%. This means that Insurance Premium Tax has doubled since October 2015 when it stood at 6%.
The increase affects all households and businesses in the United Kingdom not currently exempt from IPT.
What does this mean for you, your household and your business?
The increased IPT rate of 12% applies to policies with a start or renewal date on or after 1 June 2017.