Insurance premium tax (IPT)

FORTHCOMING CHANGE: The outcome of a consultation on improving the operation of IPT and making it easier for both the industry and HMRC to administer is that no legislative policy changes have been announced. However, in the outcome document, the government has confirmed that it will engage with industry to explore appropriate public access to a register of insurers registered to pay IPT, alongside a code of conduct for brokers to follow in relation to IPT. The consultation did not consider the rates of IPT or the exemptions. For more information on the consultation, see: Tax weekly highlights—12 November 2020—HMRC publishes consultation on IPT administration and unfair outcomes.

Insurance premium tax (IPT) is an indirect tax on insurance premiums.

Unless an insurance contract is exempt, IPT is charged as a percentage of the premium paid on certain types of insurance policies issued by certain types of insurers covering risks located in the UK. It is borne by the policyholder but collected and paid to HMRC by the insurer by reference to three-month-long accounting periods.

Whereas colloquially one might refer to IPT being charged by reference

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