30th September 2015

Insurance Premium Tax (IPT) increase

The Chancellor, George Osborne, confirmed in the Summer Budget on the 8 July 2015 an increase of 3.5%, taking the standard rate of IPT from 6% to 9.5%. The increase takes effect from 1 November 2015.

What is IPT?

IPT is a Government applied tax on general insurance premiums.  Just as you pay VAT on regular goods, you pay IPT on insurance. There are two rates:

  • a standard rate 6% (increasing to 9.5%)
  • a higher rate 20% - for travel insurance, mechanical/electrical appliances insurance and some vehicle insurance

To find out more visit: https://www.gov.uk/guidance/insurance-premium-tax

What does this change mean to you?

IPT is automatically included in the quote that you receive for your insurance.  

From 1 November 2015, all New Business, Mid-term Adjustments and Renewals will have a 9.5% IPT rate applied, i.e.

  • Inception / renewal date before 1 November 2015: 6%
  • Inception / renewal date on or after 1 November 2015: 9.5%

How will this affect your premium?

Insurance quotes are based on many different rating factors, such as age, geographical location, and occupation as well as any discounts that you may be entitled to like no claims discount on your car insurance. IPT at the increased rate will be applied to all quotes, adjustments and renewal premiums where cover starts on or after the 1 November