Insurance Premium Tax (IPT) increases to 12%
Following the Budget announcement in November 2016, the standard rate of IPT will increase by 2%. This takes the standard rate from 10% to 12%, with effect from 1st June 2017.
The higher rate of IPT – charged for travel insurance, mechanical/electrical appliances insurance ad some vehicle insurance remains unchanged at 20%.
There are a number of exemptions from IPT, including:
– Most long-term insurance
– Insurance of commercial ships and aircrafts
– Insurance of commercial goods in international transit
– Premiums for risks located outside of the UK – these may be liable to similar taxes imposed by other countries
As the standard rate remains below the VAT rate, further increases may be anticipated in due course.
Please speak to a member of our team to find out how this will impact you.