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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit - Insurance Premium Tax: Who is liable to pay the debt? Group and divisional registrations

Group Registrations

Two or more insurers that are corporate bodies (e.g. limited companies) may apply to register for IPT as a group. A taxable intermediary that is a corporate body may be a member of an IPT group. Registration will be in the name of the group’s representative member.

If the representative member is unable to pay an IPT debt due from the group, each member will be liable for that part of the debt incurred at a time when they were members of the group. Section 63 (1) of the Finance Act 1994, provides:

“Where under the following provisions of this section any bodies corporate are treated as members of a group, for the purposes of this Part –

(a) any taxable business carried on by a member of the group shall be treated as carried on by the representative member,

(aa) any taxable business carried on by member of the group who is a taxable intermediary shall be treated as carried on by the representative member,

(b) the representative member shall be taken to be the insurer in relation to any taxable insurance contract as regards which a member of the group is the actual insurer,

(bb) the representative member shall be taken to be the taxable intermediary in relation to any taxable intermediary’s fees as regards which a member of the group is the actual taxable intermediary,

(c) any receipt by a member of the group of a premium under a taxable insurance contract shall be taken to be a receipt by the representative member, and

(d) all members of the group shall be jointly and severally liable for any tax due from the representative member.”

As corporate bodies they may be wound up.

Group members remain registered under the Companies Act as limited companies and are individually liable for debts they incurred before they joined the group.

Divisional Registration

In IPT there is no provision for divisional registration.