Insurance Premium Tax Increase FAQ's
We've put together answers to some of our most frequently asked questions. If your question is not here, our friendly Customer Services Team will be happy to help.
- What is Insurance Premium Tax (IPT)?
- This is a tax on general insurance premiums, which is set by Government and HMRC
- Who decides the rate for IPT?
- This is agreed and set by Government and HMRC.
- Do I have to pay IPT?
- IPT is applied to most types of insurance including the policies we provide. So if you have pet, motor, mobile, contents, buildings or accident and private medical insurance, then there's a good chance you'll see an increase on these premiums. It is a tax put in place by the Government and is aimed to raise money for the treasury.
- When is the increase happening?
- Your premiums will increase from 1 June 2017.
- How much will the increase be?
- The increase in IPT is from 10%, to 12%. The actual amount of the increase to your premiums will be shown on your recent letter. The rate of the standard IPT is the same for all policyholders, as it's a percentage of your premium.
- Why is my policy not exempt?
- There are several reasons for a policy to be exempt. One of the main ones being that they are long term policies. Our policies are monthly renewable plans, and are therefore not considered by the Government as "long term".
- What do I need to do?
- You do not need to do anything as this change will happen automatically from your June 2017 premiums.
- Why have I not had to pay this before?
- Throughout the years we have always been keen to absorb increases in insurance premium tax at our own cost in order to not pass this on to our customers, but with this latest increase we can no longer sustain that approach. As such your premium will change from your next payment following 1 June 2017. Your usual payment date will remain unchanged.
- I no longer want to continue with the policy, can I cancel this please?
- Yes. Please contact our Customer Services Team who will be able to help you with your request.