IPT07635 - Insurance premium tax: Accounting for Insurance Premium Tax: The special accounting scheme: Payments in advance

Payments made a short time in advance of the tax point under the premium written basis do not affect the tax point.Example 5

• Insurer using legal tax point (see IPT07620).
• Payment actually received on 1 July.
• Entry made on 10 July.
• Premium shown as due on 7 July.
• Tax point - 7 July.

In those situations where payments are made more than 14 days before an insurer, using the special accounting scheme creates a tax point the insurer could be affected by arrangements intended to deal with undue delays in bringing tax to account. These are dealt with in IPT07645.