This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Change to Insurance Premium Tax
Insurance Premium Tax (IPT) is a tax on insurers and covers general insurance premiums. From 1st November, the tax is increasing.
There are two rates of the tax on general insurance premiums: A standard rate of 6%, which is being raised to 9%, and a higher rate of 20% for travel insurance, mechanical/electrical appliances insurance and some vehicle insurance.
There are several exemptions from IPT, including: Most long-term insurance, reinsurance, insurance for commercial ships and aircraft, insurance for commercial goods in international transit, and premiums for risks located outside the UK – these may be liable to similar taxes enforced by other countries.
You must register for IPT if you are an insurer that receives or intends to receive taxable insurance premiums or someone that charges the insured an insurance related fee in respect of a higher rate contract (a taxable intermediary).
You do not need to register if you are an insurer that only receives premiums relating solely to exempt insurance contracts.
However, you must register if you are an insurer receiving premiums partially in relation to exempt insurance contracts and partially in relation to taxable contracts.
Find out more about IPT here: https://www.gov.uk/guidance/insurance-premium-tax and stay aware of the increase in tax.
