Following the announcement in The Mover, January 2017, Adam Kellaway from Basil Fry has provided updated information about how the increase in Insurance Premium Tax (IPT) will be applied from next month.
As outlined in the January issue, the rate of Insurance Premium Tax (IPT) applicable to all insurance premiums is due to increase to 12% from the 1st June 2017. Fortunately, unlike the previous rate increases, the government has allowed a more practical transition period of a year, outlined as follows:
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The new rate of 12% will apply to all premiums for policies incepting on or after 1st June 2017.
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For all policies incepting prior to 1st June 2017 the old rate of 10% will apply to all mid-term/year-end premium adjustments and ‘deregulated’ IPT declarations submitted to insurers (thus being treated as received by the Inland Revenue) prior to 1st June 2018.
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All mid-term/year-end premium adjustments and ‘deregulated’ IPT declarations submitted to insurers on or after 1st June 2018 will be subject to the new rate of 12%.
For those who are providing cover to your customers under the ‘deregulated’ route, you will not need to make an interim IPT declaration to your broker, unless your policy expires during May 2018. The extended transition period also allows you more time to notify any long-term storage customers of the increase and adjust your invoicing accordingly. Your broker will advise you once the increased rate is being applied to your insurance premiums, as well as notifying you if an interim adjustment will be due as the 1st June 2018 deadline approaches.
For further information please contact your insurance broker.