From 1st October 2016 the standard rate of Insurance Premium Tax (IPT) was increased from 9.5% to 10%. There is no change to the higher rate of IPT of 20%.
The following IPT rules apply:
- All new policies and renewals that started on or after 1st October 2016 will be charged at the new IPT rate of 10%. Any mid-term adjustments to these policies that generate an additional premium will also be charged at the new IPT rate of 10%.
- For policies that started before 1st October 2016 only - there is an optional transitional period between 1st October 2016 and 31st January 2017 and RSA has chosen to take advantage of this, where possible. This means that where a mid-term adjustment results in an additional premium, the charge will continue to be subject to IPT at 9.5%. The IPT rate then increases to 10% from 1st February 2017 (or the renewal date, whichever is sooner).
- All mid-term adjustments that generate a return premium will usually be refunded at the IPT charged at the policy start date.
If you require any further information, please do not hesitate to contact your RSA Relationship Manager.