Insurance Premium Tax Update 2017

Posted on: 04 May 2017

Title

Insurance Premium Tax (IPT) Rate Change – June 2017

Purpose To advise Home & Legacy affiliated brokers about the upcoming rate increase to UK IPT and clarify Home & Legacy’s position on this change.
Date of Notice 5th May 2017
Date of Event 1st June 2017
Related Links Finance Act 1994  | Finance Bill 2017 |  Government Policy Paper
Author Angela Gordon - Operational Underwriting Manager

In his Autumn Statement of October 2016, Chancellor of the Exchequer, Philip Hammond announced an increase in the Standard Rate of UK Insurance Premium Tax (IPT) from 10% to 12%. 

The new standard rate of 12% will come into effect on 1st June 2017 and shall apply to all new business and renewals taking place on or after this date. For mid-term adjustments (MTA’s), the following conditions apply:

  • Any additional premiums generated as a result of an MTA to policies with a period of insurance commencing on or after 1st June 2017 will be taxed at 12%.
  • For policies that incepted or renewed before 1st June 2017:
    - Any additional premiums resulting from an MTA will be charged at the previous rate of 10%.
    - Any return premium must be processed according to the tax rate that was applied to the original transaction that was adjusted.

Please pass this information on to your customers so that they are aware of the tax increase and the financial implications this has on the relevant products they purchase from Home & Legacy.

If you have any questions, please call us on 0344 893 8370 or email us at info@homeandlegacy.co.uk