In the Summer Budget, announced 8 July 2015, the Chancellor confirmed an increase of 3.5% in the standard rate of IPT. This will be effective from 1 November 2015. This increase will see the standard rate move from its current 6% to 9.5%.
The rate increase is applicable to standard rate IPT only. The higher rate of IPT ‚Äì charged for travel insurance, mechanical/electrical appliances insurance and some vehicle insurance ‚Äì remains unchanged at 20%.
There are a number of exemptions from IPT, including:
‚Ä¢ most long-term insurance
‚Ä¢ insurance for commercial ships and aircraft
‚Ä¢ insurance for commercial goods in international transit
‚Ä¢ premiums for risks located outside the UK ‚Äì these may be liable to similar taxes imposed by other countries