Insurance Premium Tax: anti-forestalling
Published 8 March 2017
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Who is likely to be affected
All insurers who provide non-exempt insurance cover for UK risks and the brokers and agents who act for them.
General description of the measure
The measure repeals the current Insurance Premium Tax (IPT) anti-forestalling legislation, and introduces new legislation.
Policy objective
The new implementation arrangements for the rate rise announced at Autumn Statement 2016 mean that some of the current anti-forestalling legislation rules are no longer needed or require some updating and the legislation has been amended accordingly.
Background to the measure
As announced at Autumn Statement 2016, there has been a review of the current IPT anti forestalling legislation.
Detailed proposal
Operative date
The measure will have effect on and after 8 March 2017.
Current law
The relevant legislation is Part III, section 67 to 67C of Finance Act (FA) 1994.
Proposed revisions
Legislation will be introduced in Finance Bill 2017 to repeal section 67 to 67C of FA 1994, and replace it with new anti-forestalling rules in sections 66A, 66B and 66C of FA 1994.
Summary of impacts
Exchequer impact (£m)
| 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 |
|---|---|---|---|---|
| nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
The measure is not expected to impact on individuals and households purchasing non-exempt insurance, nor to impact on family formation, stability or breakdown.
Equalities impacts
The equality implications of this measure have been considered, and it will not impact on any areas concerning people with protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on businesses. Approximately 1,000 insurers in the UK will incur one-off costs of familiarisation with the new rules. There are not expected to be any on-going costs as the change is being introduced to safeguard IPT revenue. There is no impact on civil society organisations.
Operational impact (£m) (HM Revenue and Customs (HMRC) or other)
HMRC will not incur any operational costs in implementing this change.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax returns and receipts.
Further advice
If you have any questions about this change please contact Helen West on Telephone: 03000 585836 or email: helen.west@hmrc.gsi.gov.uk.