Insurance Premium Tax (IPT) is a tax on general insurance premiums.
There are 2 rates:
A standard rate
A higher rate – for travel insurance, mechanical or electrical appliances insurance and some vehicle insurance
There are a number of exemptions from IPT, including:
most long-term insurance
insurance for commercial ships and aircraft
insurance for commercial goods in international transit
premiums for risks located outside the UK – these may be liable to similar taxes imposed by other countries
Details of all exemptions are given in Notice IPT1 Insurance Premium Tax.
Rates From 1 June 2017
Standard rate 12% Higher rate 20%
From 1 October 2016 to 31 May 2017
Standard rate 10% Higher rate 20%
1 November 2015 to 30 September 2016
Standard rate 9.5% Higher rate 20%
From 4 January 2011 to 31 October 2015
Standard rate 6% Higher rate 20%
Up to 3 January 2011
Standard rate 5% Higher rate 17.5%
An earlier blog on IPT
Disclaimer: The information in this article was correct at time of publishing. Please note legislation is subject to change by HMRC. The Government website was the primary information source used in this article.