Our stance on the IPT rate change - October 2016
Published: 01 Jul 2016
What it means for your clients
In the March 2016 Budget the Chancellor announced an increase to the standard rate of Insurance Premium Tax (IPT) from 9.5% to 10% with effect from 1 October 2016. 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 October 2016 the following will apply:
• New business and renewals will attract the 'old' rate of IPT of 9.5% as long as the premium is processed by 31 January 2017
• Where a mid-term adjustment takes place on or after 1 October 2016 the new rate of 10% will apply to the additional premium.
Any policies with a start date on or after 1 October 2016 will be charged the new, higher rate standard IPT of 10%.
If a client pays monthly, quarterly or bi-annually, provided their Direct Debit agreements are written and agreed prior to 1 October 2016, they will have the 9.5% IPT rate applied to their premium throughout their policy year. For any mid-term additions after 1 October 2016, the new rate 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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