<iframe src="https://www.googletagmanager.com/ns.html?id=GTM-WCK3FXN" height="0" width="0" style="display:none;visibility:hidden" title="gtm-frame"></iframe>How will the latest IPT change impact me | Trade Direct Insurance
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How will the latest IPT change impact me?

08 August 2018

Important changes to Insurance Premium Tax on your insurances

In the Summer Budget, announced 16 March 2016, the Chancellor confirmed an increase of 0.5% in the standard rate of Insurance Premium Tax (IPT). This will be effective from 1 October 2016. This increase will see the standard rate move from its current 9.5% to 10%.

Standard Rate IPT

The rate increase is applicable to standard rate IPT only. The higher rate of IPT – charged for travel insurance, mechanical/electrical appliances insurance and some vehicle insurance – remains unchanged at 20%.

How might these changes affect you?

New Business: If your annual policy cover starts on or after 1st October 2016 the new IPT rate of 10% will apply.

Renewals: If your annual policy renewal cover starts on or after 1st October 2016 the new IPT rate of 10% will apply.

Mid-Term Adjustments: The rate of IPT that is charged is dependent on the insurance commencement date of the policy:

Additional cover mid-term: If processed on or before the 31st January 2017 on an existing policy with a cover commencement date prior to the 1st October the IPT rate remains 9.5% and not the higher rate of 10%.

Additional cover mid-term: If processed on or before the 31st January 2017 on an existing policy with a cover commencement date on or after the 1st October the IPT rate will be processed at the higher rate of 10%.

All additional cover requirements processed on or after 1st February 2017 will attract the new rate of IPT at 10% regardless of the existing policy commencement date.

Return premiums: If you make a change to your policy that results in a refund becoming due to you, this will be processed at the rate originally charged when the policy commenced. For return premiums on policies that commenced before 1st October 2016 9.5% will apply, not at the higher rate of 10%

Please direct any queries you may have to our Customer Service team on 0800 0280 380

Trade Direct is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent broker providing a wide range of policies to tradesmen and construction workers.

This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to fullest extent permitted by law.


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Trade Direct Insurance Services Limited (company number 1580129). Registered office 5th Floor, 40 Lime Street, London, EC3M 7AW. Trade Direct Insurance Services Ltd is authorised and regulated by the Financial Conduct Authority (FCA), firm registration number 307734. You can check this by visiting the FCA website at www.fca.org.uk/register or by contacting the FCA on 0800 111 6768

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