Important Changes To Insurance Premium Tax
The Government is to change the standard rate of Insurance Premium Tax (IPT) from 5% to 6% with effect from 4th January 2011. The rate of IPT will be applied on all policies as follows:-
if the policy incepts or renews prior to 4th January 2011 AND your instructions reach us BY 10 am on 31st December 2010 enabling us to process the premium on our system prior to 4th January 2011, then a rate of 5% IPT applies;
if the policy incepts or renews prior to 4th January 2011 AND your instructions reach us AFTER 10 am on 31st December 2010 the premium will be processed on our system on or after to 4th January 2011, therefore a rate of 6% IPT applies (this will include policies that are on a hold covered extension, or policies that are off cover but which we agree to then reinstate from the original renewal date);
if the policy incepts or renews on or after 4th January 2011, regardless of when the premium is processed on our system, then a rate of 6% IPT applies;
Mid Term Alterations which occur on or after 4th January 2011 and which result in an Additional Premium, then a rate of 6% IPT applies;
Mid Term Alterations or Cancellations which occur on or after 4th January 2011 AND the policy incepted or renewed before 4th January 2011 and which result in a Return Premium, then 5% IPT applies.
· If you are paying by monthly instalments through Premium Credit or Close Premium Finance, your instalments will not increase until the policy reaches its annual renewal date. If you instalments are collected direct by an insurer, then the tax on your instalments will automatically increase from 5% to 6% for all payments due after 4th January 2011.
If you have any questions regarding this issue please contact us on 01825 745 410