Everything you need to know about the Insurance Premium Tax increase.
IPT (Insurance Premium Tax) was brought into the insurance sector in the early 1990’s because the government believed the industry was under taxed due to not paying VAT. IPT was therefore introduced, which works in a similar way to VAT as it is added to the total price of the insurance policies.
In 1994 IPT was set at 2.5% but steadily increased to 6% by 2015 and 10% by 2016. On 1st June 2017 the IPT was increased to an all time high of 12%, which makes this the third time the tax has been increased within the last 3 years.
Consequently this means there will be an increase in a wide range of insurance policies including;
- Buildings and contents insurance.
- Student possessions insurance.
- Commercial insurance.
Unfortunately the insurance industry feels there may be further increases in the not too distant future. IPT is unavoidable and must be paid. However shopping around the market and gaining quotes from different company’s means you can compare the prices and ensure you are getting the best possible deal.