In this year’s March Budget, the Chancellor of the Exchequer announced there will be a 0.5% increase to the standard rate of insurance premium tax from 9.5% to 10% to help support flood defences.
There will be a concessionary period that will begin on 1 October 2016 and end on 31 January 2017. During this period, mid-term adjustments for policies with term start dates before 1 October 2016 will continue to be liable to IPT at 9.5% provided the premium is booked in insurers systems by 31 January 2017.
For policies incepted or renewed prior to 1 October 2016 where the transaction date is prior to 1 October 2016 the IPT rate applicable for new business, renewals and mid-term changes (additional/return premiums) will be 9.5%.
For policies incepted or renewed on or after 1 October 2016 the IPT rate for new business, renewals, mid-term changes (additional/return premium) will be 10%. For mid-term changes where there is an additional premium the IPT rate applicable will be 10%.
