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May 23rd, 2017
The 1st June 2017 sees Insurance Premium Tax (IPT) increasing from 10% to 12%, as was announced in Chancellor Phillip Hammond's 2016 Autumn Statement.
This is the third increase to the rate of IPT announced in less than two years. IPT increased from 6% to 9.5% on the 1st November 2015 having been announced in the 2015 Summer Budget by previous chancellor George Osborn, which was then followed by the March 2016 Budget where IPT was further increased to 10%.
The new 1st June 2017 IPT rate of 12% sees the following rules apply:
|New policies that incept on or after 1st June 2017 will be charged at the new IPT rate of 12%|
|Renewals that start on or after 1st June 2017 will be charged at the new IPT rate of 12%|
|Mid-term adjustments (MTAs) to the above policies that generate an additional premium will also be charged at the new IPT rate of 12%|
|For policies that incepted or renewed prior to the 1st June 2017 - MTAs that result in an additional premium being due will be charged at the old 10% rate of IPT|
|There is a backstop date of 1st June 2018 at which point IPT will be 12% for all new and additional premiums|
|Mid-term adjustments that generate a return premium will usually be refunded at the IPT charged at the policy start date.|
If you are a Larsen Howie customer and have any queries in relation to this, please feel free to contact us and we will be happy to assist.