Insurance Premium Tax

Insurance Premium Tax

Overview

This tax was first introduced in 1994, Insurance Premium Tax (IPT) is a tax on general insurance premiums, including home insurance, car insurance and travel insurance.

There are two rate bands, the standard rate of 12% and a higher rate of 20% which applies to travel insurance, appliance insurance and some car insurance.

Questions you may ask:

  • Is IPT charged on all insurance products?
  • What IPT rate is chargeable on car insurance?
  • Which insurance products attract higher rate IPT?

How does it work?

You will need to insure your vehicles for your company and your premium will be liable to this tax. Your insurer will add this tax onto your fleet premiums.

IPT increased to 12% as of 1 June, 2017, leading to increased premiums on a wide range of insurance products, including car insurance.

Insurance Premium Tax 2018/19 2019/20
Standard rate - From 1st June 2017 12% 12%
Higher Rate 20% 20%

The information provided is based on existing and proposed legislation as at November 2017 (2017 Autumn Budget). Whilst every effort has been made to ensure that information given is accurate and not misleading, this information is intended to provide a quick reference to the current tax regulations relating to company vehicles and how they impact employers and employees. The content has been provided for informational purposes only and should not be relied on as a substitute for professional advice. No responsibility can be accepted by LetsTalkFleet Ltd for any loss or liability occasioned by any person acting on or refraining from action as a result of viewing this information.