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Changes to Insurance Premium Tax

Fri 14th Aug 15

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 – charged for travel insurance, mechanical/electrical appliances insurance and some vehicle insurance – remains unchanged at 20%.

IPT Exemptions

There are a number of exemptions from IPT, including:

• most long-term insurance

• reinsurance

• 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

More information can be found at https://www.gov.uk/government/publications/insurance-premium-tax-increase-to-standard-rate/insurance-premium-tax-increase-to-standard-rate