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Insurance
premium tax increase from 4th January 2011
On a typical MGV8 classic car insurance renewal premium, the
IPT increase will amount to less than a pint of beer.
Posted: 18.12.10
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Insurance
premium tax is due to increase - new standard rate
and higher rate will have effect for premiums received
or written by an insurer on or after 4th January
2011.
The standard rate of insurance premium tax
(IPT) applies to most general insurance, including
property, motor and medical insurance. Life assurance
and other long term insurance products are exempt
from IPT. The increase is from 5 to 6 per cent.
The higher rate of IPT applies to travel
insurance and to certain insurance (e.g. extended
warranties) sold alongside motor vehicles and some
consumer goods. It was introduced at 17.5 per cent
in 1997 to stop VAT avoidance through ‘value-shifting’
between goods (subject to VAT at 17.5 per cent).
An increase in the higher rate of IPT from 17.5
to 20 per cent in line with the increase in the
standard rate of VAT due to take effect from the
same date.
HMRC
note BN19 |
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