As you may recall, last November saw a substantial increase in the Insurance Premium Tax (IPT) rate from 6% to 9.5%. Subsequently, in a following Budget announcement the Government has opted to increase this by a further 0.5% to 10%. There is no change to the higher rate of IPT of 20% which applies to leisure travel insurance and some insurance for vehicles and domestic appliances.
This increase will apply to all renewals and new insurance policies with effect from 1st October 2016. There is a 4 month HMRC transitional period until 31st January 2017 for mid-term changes to policies incepted or renewed prior to 1st October and these will be charged at the current IPT rate of 9.5%.
The IPT change will be automatically applied to your policy if it falls within the specified HMRC paramaters.
If you are in any doubt as to whether your policy will be affected then please get in touch with your usual contact.