This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Insurance Premium Tax

IPT audit assurance: IPT calculations: apportionment

A premium may be apportioned because a contract combines cover for risks subject to different rates of tax or taxable and exempt risks. Where an insurer apportions premiums this should be done in a just and reasonable manner: see IPT05820. You should ensure that the apportionment is not arbitrary and is based on firm, verifiable information. The method of apportionment used must have some relationship with the risk being covered. As insurers can use a variety of methods to apportion a risk it is not possible to be prescriptive in the range of acceptable methods of apportionment. Examples of some approaches are contained in Notice IPT1.

Where an adjustment has been made to a contract on which the premium has been apportioned you should check that the apportionment is recalculated, as it may be that the original amount of tax declared will now be incorrect.