What is IPT?
Insurance premium tax was introduced way back in 1994 as a standard 2.5% on most insurance policies. But over the years, IPT has increased, first to 6% in 2015, then to 10% and in the last Autumn Statement it was announced that a further 2% would be added on, which comes into effect on the 1 June 2017 bringing it up to 12%.
Of course, when it was first introduced it was hailed by the government as a tax on the insurance provider but naturally they simply passed it on to us, the consumer. So the government still get their taxes – stealthy. But it doesn’t end there – some insurance policies have a ‘higher rate’ IPT which is 20%, but more on that later.