Official Statistics

Quality report: Insurance Premium Tax Bulletin

Updated 24 October 2022

1. Contact

• Organisation unit - Knowledge, Analysis and Intelligence (KAI)

• Name - Indirect Tax Receipts Monitoring, Indirect Taxes, Customs & Co-ordination

• Mail address - Three New Bailey, Salford, M3 5FS

• Email - revenuemonitoring@hmrc.gov.uk

2. Data description

This publication provides a breakdown of historical receipts and liabilities for insurance premium tax (IPT).

The publication includes receipts statistics which are up to the latest full month before the bulletins release. It also includes statistics relating to liabilities which are one month behind that of duty receipts.

Liabilities statistics relate to when traders accrue tax liabilities through the provision of a service.

This publication only includes figures for previous years. Forecasts of future IPT receipts are produced and published by the Office for Budget Responsibility (OBR), and can be found on their website.

2.1 Classification system

Returns processed through ETMP, detailed in the “Source data” section, help classify the data within the IPT Bulletin and provide returns data.

A unique taxpayer reference (UTR) number is assigned to each registered UK trader. These UTRs are used during the data aggregation process.

2.2 Tax coverage

IPT is an indirect tax charged on general insurance premiums.

This analysis focuses on UK registered insurance providers.

2.3 Variable definitions

IPT receipts

The amount of IPT paid to HMRC. This is revenue reported in the bulletin.

IPT Liabilities

The amount of IPT owed to HMRC from insurance premiums.

Financial year

The statistics are aggregated into financial years. A financial year stretches from 1 April until 31 March the following calendar year.

2.4 Statistical unit

The unit in the statistics is businesses and other entities required to pay IPT within the UK.

2.5 Time coverage

The statistics cover the time period from financial year 1994 to 1995 until the latest financial year for which a complete set of IPT returns are available.

3. Statistical processing

3.1 Source data

The data used to compile the IPT Bulletin comes from several sources:

• cash receipts are taken from the Enterprise Tax Management Platform (ETMP)

• declared liabilities are taken from tax returns from registered IPT taxpayers which are taken from ETMP via the Enterprise Data Hub (EDH).

3.2 Frequency of data collection

Report the frequency of data collection e.g. quarterly or annually.

The data for IPT receipts are downloaded every month into databases for analysis and the data for IPT liabilities are downloaded every 3 months for analysis in the IPT Bulletin.

3.3 Data collection

Data on IPT receipts and liabilities are sourced from ETMP. This data is downloaded every month from the system and collated in internal files. Collection is part of the team’s normal administrative procedures.

Data on IPT liabilities are sourced from ETMP. This is downloaded from EDH and processed using the software package R as part of a new Reproducible Analytical Pipeline (RAP). Any code is thoroughly checked and quality assured. This data is downloaded every 6 months for analysis in the IPT Bulletin.

Data is sense checked and checked against previous months and years for differing trends. Any unexpected trends are thoroughly investigated and explained.

3.4 Data validation

Data validation processes are as follows:

• source data is checked against the previous release for any revisions every release and any revisions are clearly marked

• statistics are sense checked after compilation to ensure there are no mistakes or unexplained outliers

• data may be compared to external or public sources to validate that trends are consistent

3.5 Data compilation

Data for IPT receipts is taken from ETMP. The aggregated data is analysed during the data compilation and sense checked to ensure accuracy.

3.6 Adjustment

No significant adjustment takes place within the IPT bulletin.

4. Quality Management

4.1 Quality assurance

All official statistics produced by KAI must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

Analytical Quality Assurance describes the arrangements and procedures put in place to ensure analytical outputs are error free and fit-for-purpose. It is an essential part of KAI’s way of working as the complexity of our work and the speed at which we are asked to provide advice means there is a high risk of error which can have serious consequences on KAI’s and HMRC’s reputation, decisions, and in turn on peoples’ lives.

Every piece of analysis is unique, and as a result there is no single quality assurance (QA) checklist that contains all the QA tasks needed for every project. Nonetheless, analysts in KAI use a checklist that summarises the key QA tasks, and is used as a starting point for teams when they are considering what QA actions to undertake.

Teams amend and adapt it as they see fit, to take account of the level of risk associated with their analysis, and the different QA tasks that are relevant to the work.

At the start of a project, during the planning stage, analysts and managers make a risk-based decision on what level of QA is required.

Analysts and managers construct a plan for all the QA tasks that will need to be completed, along with documentation on how each of those tasks are to be carried out, and turn this list into a QA checklist specific to the project.

Analysts carry out the QA tasks, update the checklist, and pass onto the Senior Responsible Officer for review and eventual sign off.

4.2 Quality assessment

The QA for this project adhered to the framework described in ‘4.1 Quality assurance’ and the specific procedures undertaken were as follows:

Stage 1 – Specifying the question

Up to date documentation was agreed with stakeholders setting out outputs needed and by when; how the outputs will be used; and all the parameters required for the analysis.

Stage 2 – Developing the methodology

Methodology was agreed and developed in collaboration with stakeholders and others with relevant expertise, ensuring it was fit for purpose and would deliver the required outputs.

Stage 3 – Building and populating a model/piece of code

The bulletin was quality assessed as follows:

• analysis was produced using the most appropriate software and in line with good practice guidance

• data inputs were checked to ensure they were fit-for-purpose by reviewing available documentation and, where possible, through direct contact with data suppliers

• QA of the input data was carried out

• the analysis was audited by someone other than the lead analyst – checking code and methodology

Stage 4 – Running and testing the model/code

The bulletin was quality assessed as follows:

• results were compared with those produced in previous years and differences understood and determined to be genuine

• results were determined to be explainable and in line with expectations

Stage 5 – Drafting the final output

The final outputs were quality assessed as follows:

• checks were completed to ensure internal consistency (e.g. totals equal the sum of the components)

• the final outputs were independently proof read and checked

5. Relevance

5.1 User needs

This analysis is likely to be of interest to users under the following broad headings:

• national government – policy makers and MPs

• regional and local governments

• academia and research bodies

• media

• industry stakeholders

• general public

5.2 User satisfaction

The demand for the IPT Bulletin is measured by the number of unique page views which represents the number of visits during which the page was viewed at least once. Within the financial year ending in 2021, there were 1,756 unique page views.

Examples of previous consultations and surveys include:

• a user engagement survey in 2010 resulted in changes to the bulletin, including consolidating it into one bulletin from 4 separate bulletins and inclusion of historical data

• following the 2012 UKSA report, further changes were made to the bulletin, including the inclusion of commentary, graphs and background information

• in 2016, the frequency of the bulletin was altered from monthly to quarterly as a result of a consultation

• the IPT Bulletin was not up for consultation in the 2021 survey and as a result it saw no changes

5.3 Completeness

Report information on the extent to which the necessary statistics are available. Report where requirements based on relevant legislation, regulation and guidelines are not met and provide reasons for this.

It is a legal requirement that all businesses are regulated and submit the relevant returns required. Penalties exist for non-compliance. The statistics contained in this report can therefore be considered as complete.

HMRC report estimates of the tax gap across all taxes and duties annually.

6. Accuracy and reliability

6.1 Overall accuracy

This bulletin is based on administrative data, and accuracy is addressed by eliminating non-sampling errors as much as possible through adherence to the quality assurance framework. The nature of the administrative data used may mean some errors exist in the recorded figures which would impact the accuracy of production estimates.

The potential sources of error include:

• companies entering incorrect information onto return forms

• human or software error when entering the data into systems

• companies not completing their returns by the required date

• mistakes in the programming code used to analyse the data and produce the statistics

6.2 Sampling error

No sampling takes place within the IPT bulletin.

6.3 Non-sampling error

Coverage error

The data used to produce these publications is exhaustive, and covers all IPT due under UK jurisdiction. This means that data on liabilities and receipts refers to all IPT dutied legally. Coverage error is therefore not relevant.

Measurement error

The main sources of measurement error could be categorised as respondent errors and include the following:

• companies may make errors entering their information onto return forms, whether this is done on paper or electronically

• company tax return data is subsequently entered onto HMRC systems either manually or by electronic transmission, which is another point at which data may be altered due to human or software error

Nonresponse error

The IPT bulletin is routine administrative data based on receipts and clearances that must be submitted, therefore nonresponse error is not relevant.

Processing error

It is possible that errors exist in the programming code used to analyse the data and produce the statistics. This risk is reduced through developing a good understanding of the code and thoroughly reviewing and testing the programs that are used.

6.4 Data revision

Data revision – policy

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions.

6.5 Data revision

Deferments and late returns can influence the data used for the publications. For that reason, the last 6 months of data at any given time are labelled as ‘provisional’, although revisions tend to be minor. Where there are revisions they are clearly marked as ‘revised’, and information is given as to the reasons and scale of the revisions if appropriate.

Every release of a new publication, previous data is reviewed and any revisions required are made. If revised data was not previously marked as provisional it is clearly highlighted in the statistics with a ‘[revised]’ markup within the statistical tables.

Planned revisions occur with the release of the annual receipts publication. This alignment occurs every March and involves the previous financial year. Receipts are considered provisional until the publication is released.

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions.

6.6 Seasonal adjustment

No seasonal adjustment occurs within the IPT bulletin and is therefore not relevant to the publication.

7. Timeliness and punctuality

7.1 Timeliness

The bulletin is published one month after the end of the reporting period for receipts. That is, the bulletin relating to IPT duty received in January is published at the end of February. The bulletin takes around one week to produce, with the data not being available until after the middle of the month. The remaining time is spent quality assuring the information in the bulletin.

7.2 Punctuality

In accordance with the Code of Practice for official statistics, the exact date of publication will be given not less than one calendar month before publication on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

Any delays to the publication date will be announced on the HMRC National Statistics website.

The full publication calendar can be found on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

There have been no incidents of late publication of the bulletin since the previous IPT Bulletin Quality Report was produced in 2013 which is available through the UK Government Web Archive from the National Archive.

8. Coherence and comparability

8.1 Comparability over time

Comparability over time of duty rates and receipts at constant prices is reliant upon the deflator used. HMRC uses the Inflation and price indices series published by the Office for National Statistics (ONS), and values are therefore subject to any biases this series might present.

8.2 Coherence – cross domain

No known issues regarding coherence between domains.

Coherence – sub-annual and annual statistics

No known issues regarding coherence between sub-annual and annual statistics.

Coherence – national accounts

The statistics are coherent with the national accounts framework, but users should note that IPT duty revenue is reported on a cash basis by HM Revenue and Customs (HMRC), i.e., when cash payments are received, but within some national accounts publications, such as the Office of National Statistics Public Sector Finances publication, IPT duty revenue is published on an accrued basis, i.e., when tax liability was accrued by taxpayers.

8.3 Coherence – internal

No known issues regarding coherence between internal datasets.

9. Accessibility and clarity

9.1 News release

Link all press releases linked to the data over the past year.

9.2 Publication

The data is publicly available within the IPT Bulletin and is published at 9:30 am on the pre-announced date of release.

The IPT Bulletin commentary is published in Hypertext Markup Language (HTML) format, as generated within internal UK government HTML Markdown software. The IPT Bulletin data tables which accompany the commentary are published in Open Document Spreadsheet (ODS) format.

Accompanying the bulletin is a background and references document which includes:

• definitions for IPT duties and products

• details on how IPT is levied and paid

• methodology for producing IPT statistics

• statistical quality information, including HMRC’s rounding policy

• hyperlinks to relevant pages where bulletin users can find more information

There is also an accompanying historic IPT rates document.

Both historic duty rates and background and references are published in HTML format.

In November 2020, substantial formatting changes were made to the IPT Bulletin to ensure alignment with accessibility regulations for digital content from public bodies as legislated within the Public Sector Bodies (Websites and Mobile Applications) (No. 2) Accessibility Regulations 2018.

This reformatting of the IPT Bulletin formed part of HMRC’s wider accessible documents policy.

Changes made to the IPT Bulletin included:

• replacement of Portable Document Format (PDF) files previously used for statistics commentary with HTML documents for the same purpose

• migration of all IPT background, references and rates information from Microsoft Excel tables to HTML documents

• migration of data tables from Microsoft Excel to ODS format

• simplification of language used to avoid jargon and clear explanations used to describe all non-decorative features

An accessibility report was first produced to identify required format changes. The overriding aim of this reformat was to improve how perceivable, operable, understandable and robust the IPT Bulletin is for all users, in line with the Web Content Accessibility Guidelines (WCAG 2.1) design principles for accessibility.

9.3 Online databases

This analysis is not used in any online databases.

9.4 Micro-data access

Access to this data is not possible in micro-data form, due to HMRC’s responsibilities around maintaining confidentiality of taxpayer information.

9.5 Other

There aren’t any other dissemination formats available for this analysis.

9.6 Documentation on methodology

Background and references to the IPT bulletin is publicly available to users within the IPT Bulletin.

9.7 Quality documentation

All official statistics produced by KAI, must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

Information about quality procedures for this analysis can be found in section 4 of this document.

10. Cost and burden

The quarterly update to the IPT Bulletin takes up to 4 working days in total for the main analyst to complete and receive QA from other analysts, the team leader, and the person signing off the release. The annual cost, therefore, is around 16 days a year (4 days per bulletin completed 4 times a year).

This is the most time consuming bulletin of all those published by the team, as it encompasses the retrieval and aggregation of several data sources, which in some cases can be lengthy procedures. The number of checks to the data is naturally large, although it could be reduced with further scrutiny.

There is no respondent burden since the data is taken from administrative sources which are used by taxpayers to make their usual returns to HMRC.

11. Confidentiality

11.1 Confidentiality – policy

HMRC has a legal duty to maintain the confidentiality of taxpayer information.

Section 18(1) of the Commissioners for Revenue and Customs Act 2005 (CRCA) sets out our duty of confidentiality.

This analysis complies with this requirement.

11.2 Confidentiality – data treatment

There are no special rules for confidentiality or data treatment in these statistics.

Before going live, the statistics is classified as pre-released National Statistics, and is therefore subject to a restricted protective marking when referred to in email correspondence and is subject to the Code of Practice for Official Statistics, which is strictly enforced.