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HMRC internal manual

Insurance Premium Tax

Calculating the value of the premium: types of contract covering exempt and taxable risks: the meaning of an ‘identifiable risk’

The fact that an insured party has one or more establishments abroad does not mean that a part of each premium, relating to all of their insurance policies, is exempt from IPT. For example, a policyholder may have establishments in both the UK and France. They may however have no employees in France, staffing the French office with agency staff. UK employees may never visit the French office. Therefore, notwithstanding the fact that they have a non-UK establishment, the entire premium for their employers’ liability policy is liable to IPT. This is because, having no employees in France, the business has no employer’s liability there, and therefore no identifiable risk attaching to the French establishment.