Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Insurance Premium Tax

Overview and the law: insurers for IPT purposes: fronting

Under a fronting agreement, the ‘fronting’ company acts as a front for a second insurer with the intention of passing the risks wholly to the second insurer. The relationship between the two insurers in these circumstances may vary. In some cases, the first insurer will be the agent of the second, in which case it is the second insurer who has the liability to account for IPT. In some cases, the first insurer may actually be the insurer under the contract (with the liability to account for IPT) and may pass the risk on to the second insurer under a reinsurance arrangement. (The exemption for reinsurance is dealt with in IPT04200).

It is very important that in any particular case you are clear which insurer(s) are liable to account for the tax.