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HMRC internal manual

Insurance Premium Tax

Insurance premium tax: Accounting for Insurance Premium Tax: The special accounting scheme: Definition of premium adjustments

Premium adjustments are changes in the premium charged under the terms of a particular policy. Adjustments may involve either additional premiums (APs) or reductions in premiums, known as return premiums (RPs). Changes in premiums can occur when the risk changes - for example when a motorist buys a more expensive car, or when a firm increases the number of employees in respect of which it has to buy liability cover.