Our stance on the IPT rate change - June 2017
Published: 24 Feb 2017
What it means for your clients
In the Autumn Statement 2016 the Chancellor announced an increase to the standard rate of Insurance Premium Tax (IPT) from 10% to 12% with effect from 1 June 2017. This will affect the cost of your clients' private medical insurance policies from this date.
For some other insurance policies, such as travel insurance, the higher rate of IPT remains unchanged at 20% and VAT is also unaffected.
If you have clients with policies starting or renewing prior to 1 June 2017 the following will apply:
• New business and renewals will attract the 'old' rate of IPT of 10%
• Where a mid-term adjustment takes place on or after 1 June 2017 the new rate of 12% will apply to the additional premium.
Any policies with a start date on or after 1 June 2017 will be charged the new, higher rate standard IPT of 12%.
If a client pays monthly, quarterly or bi-annually, provided their Direct Debit agreements are written and agreed prior to 1 June 2017, they will have the 9.5% or 10% IPT rate applied to their premium throughout their policy year. For any mid-term additions after 1 June 2017, the new rate of 12% will apply on any additional premium.
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For more detailed information please refer to our technical summary.
If you have any questions or want any further information then please speak to your usual Aviva sales consultant.
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