Insurance Premium Tax is increased again in Autumn Statement

The Government has announced in their Autumn Statement that Insurance Premium Tax (IPT) is to increase to 12% from June 2017. This follows an increase from 6% to 9.5% in November 2015 and again in October 2016 to the current rate of 10%. The Chancellor has confirmed that the increases are a measure to help the Government fund flood defences and resilience.

As with the other rate amendments in recent years, it is likely there will be a transition period whereby mid-term changes to policies renewed or incepted before the effective date in June 2017 will be subject to the lower rate, being 10%.

For those Removal and Storage contractors that are operating under the regulatory exemption, which enables your customers to access the cover provided under your Customers’ Goods policy for a fee, you will need to make sure you are passing increased IPT charges to your customers.

If you are storing effects under a long-term storage contract, it is important that you write to your customers in good time to make them aware that the increased rate will apply to your insurance charges. Your insurers are likely to also require an interim IPT declaration from you in order for the lower rate to apply. We would suggest you contact your insurance broker to discuss the process you need to follow.

The Government has announced in their Autumn Statement that Insurance Premium Tax (IPT) is to increase to 12% from June 2017. This follows an increase from 6% to 9.5% in November 2015 and again in October 2016 to the current rate of 10%. The Chancellor has confirmed that the increases are a measure to help the Government fund flood defences and resilience.

As with the other rate amendments in recent years, it is likely there will be a transition period whereby mid-term changes to policies renewed or incepted before the effective date in June 2017 will be subject to the lower rate, being 9.5%.

For those Removal and Storage contractors that are operating under the regulatory exemption, which enables your customers to access the cover provided under your Customers’ Goods policy for a fee, you will need to make sure you are passing increased IPT charges to your customers.

If you are storing effects under a long-term storage contract, it is important that you write to your customers in good time to make them aware that the increased rate will apply to your insurance charges. Your insurers are likely to also require an interim IPT declaration from you in order for the lower rate to apply. We would suggest you contact your insurance broker to discuss the process you need to follow.

Date: December 8th, 2016 | Categories: News | By: | Comments: 0

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