Insurance Premium Tax (IPT) is back in the news once again, because it’s on the rise. But what is IPT? And how will it affect you?
What is IPT?
First introduced in 1994, IPT is a tax on general insurance and has been on the rise in recent years. In last year’s Autumn Statement Chancellor Philp Hammond announced that the standard rate of IPT would be rising from 10% to 12% in June 2017.
Back in 2015, standard rate IPT was only 5%! So in just 2 years, IPT has over doubled!
Two types of IPT
There are two types of IPT
- STANDARD RATE – For all general insurance products including home, pet and car insurance. This is rising to 12% in June 2017
- HIGHER RATE – A higher IPT rate of 20% is charged on travel insurance, mechanical/electrical appliances and some vehicle insurance.
Life insurance is exempt from IPT.
Will it affect you?
The rise in IPT will not affect any policy which you currently own. The new rate of IPT will only be applicable on new policies, so expect to see the higher rate at renewal time.
The best way to avoid paying too much for your insurance is to shop around. Give our team a call on 01243 784000 or visit www.PayingTooMuch.com for a great price on your home, life, travel, car insurance and much more!
