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HMRC internal manual

Insurance Premium Tax

Accounting for Insurance Premium Tax: errors on IPT returns

An error may be adjusted for on the IPT return form provided on-line:

  • the adjustment relates to an error or errors in an accounting period ending no more than 4 years ago, subject to the transitional arrangements described in the previous paragraph
  • the amount of the underdeclaration or overdeclaration is limited to £10,000 or if greater, up to 1% of the net value of taxable premiums shown in box 10 of the IPT Return, the error not exceeding £50,000; and 
  • for overdeclarations, the insurer bore the cost of the error (i.e. the IPT was not borne by a customer or an intermediary); and 
  • the error is not deliberate.

Prior to 1 July 2008 the above limit for making an adjustment for an underdeclaration or overdeclaration was £2,000 or less.

Errors discovered in relation to accounting periods beginning on or after 1 April 2009 where the due date is on or after 1 April 2010 may be liable to a penalty if they are careless or deliberate. For further details see IPT10375.