C5 - C Flashcards
main taxes imposed by the UK Government on risks written in the UK
Insurance premium tax (IPT) is a tax levied by the UK Government on general insurance premiums in the UK.
There are two rates: standard and higher
The standard rate
The standard rate is 12%.
The higher rate
The higher rate is 20% for travel insurance and some insurances, such as those sold in conjunction with the purchase of vehicles and electrical appliances (and are sold as part of the wider deal, such as extended warranty)
what are exempt from IPT?
Most long-term insurances, together with reinsurance and insurance on ships, aircraft and international goods in transit are exempt from IPT, as are most risks located outside the UK.
These risks, however, may be liable for similar taxes imposed by other countries.
How is IPT paid?
It must be shown on all the documentation (separately from the premium amount) when the risk is processed through the central market databases by Velonetic
The IPT amount having
been paid via the broker to the insurer is held by the insurer in an account from which they
can pay the funds onwards to Her Majesty’s Revenue and Customs (HMRC) generally on a
quarterly basis
