Earlier this year we told you about the increase in Insurance Premium Tax that was announced during the 2016 Budget in March.<\/p>\n
Now, we know that was a long time ago and we hope you have slept by then, but we\u2019re fast approaching the 1st October, which is when the newly increased 10% IPT comes into effect.<\/p>\n
Don\u2019t worry if you can\u2019t remember the ins and outs and what this increase means for your insurance policies, we\u2019re about to explain it all again…<\/p>\n
Why does IPT exist?<\/b><\/p>\n
Insurance premium tax was introduced in 1994 at a rate of 2.5% as a way to raise revenue from the Insurance Sector as Insurance is exempt from VAT \u2013 the most common form of tax. The new rate of 10% will be introduced on the 1st October 2016, and by February 2017 it will be applied to all qualifying policies, regardless of when the contract was arranged.<\/p>\n
Our IPT rate is much lower than the 19% in other European countries, however we still have the fourth most costly car insurance premiums in the world after the US, Austria and Germany.<\/p>\n
What impact will it have?<\/b><\/p>\n
IPT will be applied to all policies which of course includes buildings and contents and even car insurance. It\u2019s anticipated that the increase of 0.5% will equate roughly to an extra \u00a32 on motor insurance and \u00a31 on building and contents. This is less of a hike than that of last November when IPT was increased from 6 to 9.5%.
\nTravel insurance remains unaffected, as it falls into a higher rate of IPT which was first introduced at 17.7%. This has since increased to 20%.<\/p>\n
Because the tax is a percentage of the premium, location and circumstances of the policyholder could have a significant impact on how much they would have to pay in IPT.<\/p>\n
Why is it being increased?<\/b><\/p>\n
The extra funds generated by the increase are to be ring-fenced for flood defences and resilience strategies. Last year\u2019s increase was anticipated to generate an extra \u00a31.5 billion, while the extra 0.5% due in October should further boost this figure by 700million.<\/p>\n
If you would like to know more about how IPT might affect you specifically, please call us on 01564 730 900<\/b> or email enquiries@edwardsinsurance.co.uk<\/b>.<\/p>\n","protected":false},"excerpt":{"rendered":"
Earlier this year we told you about the increase in Insurance Premium Tax that was announced during the 2016 Budget in March. Now, we know that was a long time ago and we hope you have slept by then, but we\u2019re fast approaching the 1st October, which is when the newly increased 10% IPT comes […]<\/p>\n","protected":false},"author":7,"featured_media":126,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[186,190],"tags":[143,144,38,167,168,169,170,171],"acf":{"related_articles":null},"_links":{"self":[{"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/posts\/1716"}],"collection":[{"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/comments?post=1716"}],"version-history":[{"count":1,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/posts\/1716\/revisions"}],"predecessor-version":[{"id":1865,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/posts\/1716\/revisions\/1865"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/media\/126"}],"wp:attachment":[{"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/media?parent=1716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/categories?post=1716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.networkportfolio.co.uk\/edwardsinsurance.co.uk\/wp-json\/wp\/v2\/tags?post=1716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}