03 September 2016
Insurance Premium Tax is a tax applied to insurance by the Government. It is included within any premium quoted by an insurance company or an insurance broker and it is the responsibility of the insurance company to ensure it is paid to the Treasury.
We are sure you will recall the Chancellor of the Exchequer increased insurance premium tax from 9.5% to 10% from 1st October 2016, this being the second rise in under 12 months.
The previous rise was in November 2015 when it rose from 6% to 9.5%.
It has been announced another rise will take place and will become effective from 1st June 2017 and will increase the rate to 12%.
However, bear in mind our EU neighbours pay considerably more than we do. In Germany, the rate is 19% and in Finland, it is 24%!
One of the reasons, we are told, for these increases is to allow more monies to be invested in flood defence and resilience.