Insurance Premium Tax: guide for insurers
This is a tax on insurers and covers general insurance premiums. Find out about rates, exemptions, registering, record keeping and payments.
Overview
Insurance Premium Tax (IPT) is a tax on general insurance premiums. There are 2 rates:
- a standard rate 12%
- a higher rate 20% for
- travel insurance
- certain insurance when sold with mechanical/electrical appliances
- certain insurance when sold with some motor vehicles
There are a number of exemptions from IPT, including:
- most long-term insurance
- reinsurance
- insurance for some commercial ships and aircraft
- insurance for commercial goods in international transit
- premiums for risks located outside the UK - these may be liable to similar taxes imposed by other countries
Details of all exemptions are given in Notice IPT1 Insurance Premium Tax.
Who needs to register
You need to register and account for IPT if you’re:
- an insurer who receives or intends to receive taxable insurance premiums
- someone who charges the insured an insurance related fee in respect of a higher rate contract (a taxable intermediary)
You don’t need to register if you’re an insurer who only receives premiums which relate wholly to exempt insurance contracts.
But you will need to register if you’re an insurer who receives premiums partially in relation to exempt insurance contracts and partially in relation to taxable contracts.
HM Revenue and Customs (HMRC) will confirm whether or not you have to submit returns, based upon the value of the premiums involved and the corresponding taxable proportion.
When you should register
You must be registered from the date you receive (or someone receives on your behalf) your first taxable premium.
You need to tell HMRC within 30 days of forming the intention of receiving taxable premiums as the insurer.
If you’re a taxable intermediary you need to register within 30 days of the date on which you decide to charge taxable intermediaries’ fees.
If you don’t notify HMRC at the right time you may have to pay a penalty.
How to register
You can register using the online form or if you are unable to use it you can use the print and post form IPT1.
If you are a Lloyd’s Syndicate, or, wish to appoint an agent to deal with your Insurance Premium Tax affairs, you can only register using the print and post form. You should send your completed form to:
HM Revenue and Customs
Excise Processing Teams
BX9 1GL
United Kingdom
If you’re a partnership you can only register using the print and post forms IPT1 and IPT 2, Partnership Details ( which asks for name and address details of all partners).
Group treatment
To apply for group treatment, you must choose one of the corporate bodies to act as the ‘representative member’.
The representative member must fill in an IPT1 print and post form and form IPT 50, Application for Group Treatment. All group members must also complete the form IPT 51, Group Member Details.
Groups can only apply using the print and post forms.
Forms
You can get forms IPT 1 and IPT51 online and forms IPT 2 and IPT 50 by calling the VAT Helpline on Telephone: 0300 200 3700, Monday to Friday, 8am to 6pm.
Send the completed forms to:
HM Revenue and Customs
Excise Processing Teams
BX9 1GL
Returns and payments
Once you’ve registered, HMRC will send you a ‘notice to file’ telling you when you need to submit your return, usually every 3 months. You should send a return even if you don’t owe any Insurance Premium Tax.
You can use the online service to send your return (IPT100). Make sure you send your payment for any tax due when you submit your return. If your return deadline falls on a weekend or a bank holiday, make sure your payment reaches HMRC on the last working day before the due date.
Find out how to pay Insurance Premium Tax.
Records you need to keep
You must keep:
- any business and accounting records you have
- policy documents, cover notes, endorsements and similar documents (original or copies)
- all credit and debit notes or other documents which show an increase or decrease in the amount of any premiums due, and any copies of such documents that you issue
- any other records HMRC asks you to keep
Further information
HMRC has produced these notices, which cover various aspects of insurance:
Notice IPT1 Insurance Premium Tax
If you would like further help you can ring the VAT Helpline on Telephone: 0300 200 3700, Monday to Friday, 8am to 6pm.
Last updated 6 March 2019 + show all updates
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The section on How to register has been updated to take account of the new online form.
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Updated to include the present IPT rate
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In the overview section, the standard rate of IPT has been changed from 9.5% to 10%.
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IPT standard rate increased to 9.5% from 1 November 2015
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Link to form IPT51 added under How to register section.
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First published.