In autumn 2016 the Government announced that insurance premiums which are taxed at the standard rate of Insurance Premium Tax (or IPT) would increase by 2%.
The change takes effect on 1st June 2017 and it means that IPT will be charged at 12% – so here’s some useful information on the change.
Who will be affected?
The increase in IPT will affect anybody incepting an insurance policy on or after the 1st June 2017, or a policy with a start date of 1st June onwards.
If you’re a current policy holder with HomeLet and your renewal is before 1st June 2017, your rate of IPT will be set at 10% for the policy. If your policy renewal date is after 1st June, then your renewal premium will be adjusted to reflect the new rate of IPT.
I’m getting a quote with HomeLet; how is the price impacted?
- If you’ve got a quote with a policy start date before the 1st of June, your quoted premium will have the rate of IPT set at 10%
If the policy start date on your quote is on or after 1st June 2017, your quoted premium will include IPT at a rate of 12%
Will IPT increase again in the future?
The rate of IPT is set by HMRC, so any changes are controlled by the Government. It’s never possible to say for sure whether IPT will increase in the future. What we do know, however, is that IPT has increased three times in the last two years and, only as far back as 2010, IPT was set at 5%.
If you’ve got any questions, you can call our insurance teams on 0800 035 8258.