Changes to Insurance Premium Tax
The Government announced on 8th July that it would be increasing the standard rate of Insurance Premium Tax (IPT) from 6% to 9.5% with effect from 1 November 2015 for all new business, renewals and additional premiums for mid-term adjustments, (in addition the higher rate of IPT remains at 20%).
|The rules for implementation are –
Policies Incepted or Renewed On or After 1/11/2015
- Will attract the new IPT rate of 9.5% regardless of when the quote was provided or any rate guarantees that may apply
- Will attract the new IPT rate of 9.5% for any mid-term change which results in payment of an additional premium
- Will attract the new IPT rate of 9.5% rebate for any mid-term adjustment or cancellation resulting in a refund of premium
Mid Term Adjustments on policies incepted or renewed before 1st November 2015:
i) Where there is a RP and a refund is required:
– IPT on return premiums will be credited at the rate applied to the initial premium being adjusted.
ii) Where there is an AP
– Additional premiums processed up to and including 29th February 2016, will be subject to the 6% IPT.
– Additional premiums processed after 29th February 2016 will be subject to the 9.5% IPT.