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Changes to Insurance Premium Tax (IPT)

Sat 1st Oct 16

Following the Budget announcement in March 2016, the standard rate of IPT charged to personal and commercial customers will increase by 0.5%.

This takes the standard rate from 9.5% to 10%, effective from 1 October 2016.

Standard Rate IPT

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.

For more information visit the gov.uk website