Insurance Premium Tax has increased

Insurance Act

From 1 October 2016 the standard rate IPT increased by 0.5%, from 9.5% to 10%. LV= will follow the Special Accounting Measures which provide a transitional period as outlined below.

The good news is w – our systems, software houses and policy documents have all been updated to include the increase.

Here’s a reminder of the changes:

Policy start date and renewals

  • Policies with a start or renewal date of 1 October 2016 will be subject to the new standard rate of 10%
  • Policies with a start or renewal date before 1 October 2016 will be subject to the current rate of 9.5% as long as the premium brought to account by 31 January 2017, premiums brought to account on or after the 1 February 2017 will be subject to the new standard rate of 10% regardless of the start/renewal date

Mid Term Adjustments

  • Any mid-term adjustments occurring before 1 October 2016 will be subject to the current rate of 9.5%
  • Any mid-term adjustments occurring on or after 1 October 2016 will be subject to the current rate of 9.5% as long as the original policy was incepted prior to 1 October 2016 and any additional premiums relating to the MTA are brought to account prior to 1 February 2017
  • Any mid-term adjustments occurring on or after 1 October 2016 where the original policy has a start or renewal date on or after 1 October 2016 will be subject to the new standard rate of 10%

Any premium refunds will include the IPT rate paid based on the original policy inception date or MTA.

If you have any questions about the changes please speak to David Simpkin (Commercial Lines) – 0207 634 4446 or Michael Warner (Personal Lines) – 01277 721 714.



Categories: Commercial Lines, Personal Lines

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