National statistics

Insurance Premium Tax Bulletin background and references

Updated 28 July 2023

1. Overview

Insurance Premium Tax (IPT) is a tax on general insurance premiums. There are two rates:

• a standard rate of 12 percent
• a higher rate of 20 percent for travel insurance and some insurance for vehicles and domestic/electrical appliances

Most long-term insurance is exempted from the tax, as is reinsurance, insurance for commercial ships and aircraft and insurance for commercial goods in international transit. Premiums for risks located outside the UK are also exempt, but they may be liable to similar taxes imposed by other countries.

More information on IPT is published at Insurance Premium Tax: detailed information or for details on when to register for IPT, go to Insurance Premium Tax: guide for insurers.

Further information on current and historical IPT rates is available in the accompanying Historical Insurance Premium Tax rates document.

2. Statistical background

Coverage

These statistics cover the United Kingdom. It is not possible to provide any geographic breakdown on where tax liability arose for IPT as HMRC does not collect this data on the IPT return. HMRC does not publish any geographic breakdown on IPT by taxpayer registered address as this is not related to where the tax liability arose. HMRC does not collect sector information for IPT.

Data sources

The data source for the tax liabilities statistics is the tax returns from the registered IPT taxpayers, which HMRC sends to each taxpayer. Tax liabilities statistics are reported according to the last month of the taxpayers accounting/liability period.

IPT taxpayers mainly follow quarterly accounting periods. Tax returns are due by the end of the month following the accounting period. Payment of tax receipts is also generally due to HMRC by the same time, but taxpayers who pay by direct debit are given a 7 day extension. These accounting periods and payment patterns cause a 1 to 2 month lag between accounting periods ending and receipts being received by HMRC.

The tax liabilities statistics for standard rate liabilities and higher rate liabilities are aggregated directly from the returns. These statistics are revised whenever amendments are made to returns or when late returns are received. For this reason the last six months of publication are provisional and may be updated based on incomplete or unfinalized return data.

Total cash receipts is based on the cleared cash receipts in HMRC’s bank accounts received during the month relating to IPT (for example, total cash receipts statistics for March 2011 refer to cash received in HMRC’s bank accounts during March 2011). Total cash receipts may be negative where repayments made to taxpayers exceed payments.

The total cash receipts statistics are generally not revised as cash received during the month is known with a high degree of certainty by the end of the month. One exception to this is that at the end of each financial year the total cash receipts statistics are aligned with HMRC’s Trust Statement with the March figure adjusted if there is any difference. Where adjustments have been made these are usually small.

Rounding policy

Total cash receipts are rounded to the nearest million pounds. Tax liabilities declared are rounded to the nearest 0.1 million pounds. Any inconsistency between the totals and their constituent parts, or any inconsistency between the text and the tables, is due to the totals and commentary being calculated using unrounded data.

Revisions policy

Deferments and late returns can influence the data used for the publications. For that reason, all data added to the publication since the previous release is lablelled as provisional, although revisions tend to be minor. Revisions are only marked when non-provisional figures are changed.

Total cash receipts are aligned with the National Audit Office (NAO) audited ‘HMRC annual report and accounts’. This can result in adjustments to March statistics to ensure consistency between reported financial year totals. As such, March figures are treated as provisional until aligned with the annual report and accounts.

In June 2021, revisions to the historical tax receipts data of the 2018 to 2019 financial year were made. More information on the receipts revisions can be found in the statistics announcement dated 25 May 2021.

Pre-release access to statistics

The IPT Bulletin provides no official pre-release access to the statistics. But as these statistics are sourced from administrative data, they may be used within HMRC for operational reasons before publication. HMRC maintains records of those with pre-release access to the department’s National Statistics.

3. Statistical quality

HMRC’s statement on statistical quality is published at Statistics at HMRC.

These statistics are based on administrative data sources. These statistics undergo a thorough internal quality-assurance procedure before publication. Total cash receipts statistics are aligned with HMRC’s Trust Statement, which is audited by the National Audit Office. The quality of these statistics depends on the purpose that they are intended to be used for.

For understanding tax liable and paid for IPT these statistics are of high-quality as they are based on the returns and payments of all registered taxpayers. However for other purposes the statistics may not be the most appropriate as the scope of the statistics is defined by tax laws.

Total tax liabilities declared is persistently slightly higher than total cash receipts. For a period of growing IPT revenue this is to be expected because total cash receipts lags total tax liabilities declared. Possible reasons for the differences are varying definitions of revenue, tax debt or payments made to the wrong bank account (e.g. IPT paid into VAT bank accounts). IPT does not have significant tax debt. The total cash receipts are the preferred series and are the main series used by HMRC and audited by the National Audit Office.

4. Contacts

The IPT Bulletin is produced by the Indirect Tax Receipts Monitoring team as part of the Excise duties, VAT and other tax statistics collection.

For statistical enquiries, contact:

revenuemonitoring@hmrc.gov.uk

HMRC
Knowledge, Analysis and Intelligence (KAI)
Floor 2 Annex
Albert Bridge House
Manchester
M60 9AF

For media enquiries see HMRC press office.

For more general enquiries go to Contact HM Revenue & Customs or contact the Excise and Customs Helpline on 0300 200 3700.

5. Publication calendar

Following a consultation on changes to HMRC statistics publications, it was announced that that we will cease the publication of the winter IPT publication. The final release was 31 January 2023. The IPT bulletin will now be released annually in July.

The IPT Bulletin is published on the last working day of the month, but is brought forward by a day whenever the day preceding the last working day is a non-working day (e.g. the bulletin is never published on a Monday).

From June 2019, the bulletin has been published on GOV.UK. Archive versions of the IPT Bulletin published on GOV.UK after July 2019 are no longer hosted on GOV.UK and are instead available via the UK Government Web Archive, from the National Archives.

6. User engagement

HMRC welcomes user engagement to improve the departments National and Official Statistics. You can contact statistics producers via our feedback avenues.

We consulted users about indirect tax receipts statistics from 20 November 2015 to 5 February 2016. The results of this consultation have been published.

A consultation on the reduction and consolidation of HMRC statistics publications was held between 8 February 2021 and 12 March 2021 and the results have been published. No changes to the IPT Bulletin were announced.

A consultation on changes to HMRC statistics publications was held between 24 October 2022 and 16 January 2023 and the results have been published. It was announced that that we will cease the publication of the winter IPT publication. The final release was 31 January 2023.

7. National Statistics

The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

Designation can be broadly interpreted to mean that the statistics:

• meet identified user needs
• are well explained and readily accessible
• are produced according to sound methods
• and are managed impartially and objectively in the public interest

Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

For general enquiries about National Statistics, contact the National Statistics Public Enquiry Service at:

Telephone: 0845 601 3034
Overseas: +44 (1633) 653 599
Minicom: 01633 812399
Fax: 01633 652747
Email: info@statistics.gov.uk

Letters:

Customer Contact Centre
Room 1.101
Cardiff Road
Newport
NP10 8XG

8. Related statistics

National statistics for cash receipts for all HMRC administered taxes are published in HM Revenue and Customs receipts.

The IPT Factsheet has been discontinued as a result of the Indirect Taxes User Consultation Exercise. Archived copies are still available. Historic statistics on the number of IPT registered taxpayers can also be found on the IPT Factsheet.

HMRC does not publish a specific tax gap for IPT, but the ‘Measuring tax gaps’ Official Statistics estimate the tax gap for all taxes and duties administered by the department. Tax gaps are the difference between tax collected and that, which in HMRC’s view, should be collected.

HMRC publish the Tax ready reckoner Official Statistics which show the estimated direct impact on HMRC tax revenues if simple changes were made to various taxes. They are intended to assist researchers and policymakers.

The Office for National Statistics (ONS) and HM Treasury publish ‘Public Sector Finances’, which covers tax receipts from all taxes on the ONS website. This does not separate out IPT receipts. IPT receipts are forecast by the independent Office for Budget Responsibility (OBR) and published on the OBR website.