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Insurance Premium Tax to rise to 12%

Special accounting scheme

We use the ‘special accounting scheme’. This means that the premium for risks incepting prior to 1 June 2017 (at the current 10% IPT rate) MUST be paid by 31st May 2018.

New business

The higher rate of 12% IPT applies to when the risk is bound rather than when it is quoted. Any risk bound on 1 June onwards will be liable for 12%.

Additional and return premiums 1 June onwards

Any return premium is given at the rate of tax levied when paying the premium.

If an additional premium is processed prior to 1 June 2018 then the rate of IPT is the same as at the policy’s inception date

If the additional premium is processed on or after 1 June 2018 then IPT applies at 12%.

 

Further information can be found on the HMRC website.