9. Insurance Premium Tax

Insurance Premium Tax (IPT) is usually included in the price you pay for insurance.

You don’t pay VAT on insurance.

The rate of IPT depends on the type of insurance and who supplies it.

Standard rate IPT

The rate is 12% on most types of insurance, including car, pet and home insurance.

Higher rate IPT

There’s a higher rate of 20% for travel insurance, and insurance arranged by the supplier (rather than an insurance company) on:

  • vehicles, including hired vehicles - but the standard 12% rate is charged on ordinary motor insurance
  • electronic goods and other household appliances - this includes gas central heating but not mobile phones


There’s no IPT on life insurance and income protection insurance.