Accounting for Insurance Premium Tax: purpose and outline of this section
This section describes how insurers should account for IPT.
It explains what the IPT accounting rules mean and, amongst other things, it deals with:
- tax points;
- premium adjustments;
- transitional provisions for a rate change under the two separate IPT accounting schemes (‘cash receipt’, and ‘premium written’ also known as the special accounting scheme).
The following sections focus on accounting details and, to assist understanding, a series of practical examples have been included.
These sections do not explain how to audit an insurer’s IPT accounting system, nor do they say what to do if the insurer has failed to account properly for the tax. These issues are dealt with in IPT08000 IPT09100, IPT09200, IPT09250, IPT09300 and IPT09550. For transitional provisions at the start of the tax, contact the Deductions & Financial Services Team.