Insurance Premium Tax: power to make regulations by reference to notices
Published 20 July 2022
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Who is likely to be affected
This measure will affect insurance providers liable to be registered for Insurance Premium Tax (IPT).
General description of the measure
The measure will give HMRC powers to make regulations which will permit HMRC to move Insurance Premium Tax forms from secondary legislation and into a public notice, by way of a statutory instrument.
Policy objective
This measure is intended to provide an administrative facilitation. This will improve efficiency, enabling HMRC to amend Insurance Premium Tax forms without the need to legislate, and to prepare for digitisation in line with wider government strategy. This will make sure HMRC will be able to respond quickly when changes are required.
Background to the measure
An Insurance Premium Tax consultation with the insurance industry, launched on 5 November 2020, suggested policy proposals intended to prevent unfair outcomes and improve the administration of the tax for both the industry and HMRC. The consultation closed on 5 February 2021.
The summary of responses to the consultation was published on 30 November 2021. At that time, the government announced its intention to remove the Insurance Premium Tax forms from secondary legislation, to make the tax easier to administer. This measure takes that commitment forward.
Detailed proposal
Operative date
The measure will have effect on and after the date of Royal Assent to Finance Bill 2022-23.
Current law
Part 3 of the Finance Act 1994 provides for the charge to Insurance Premium Tax and contains various powers to make regulations for the administration of the tax. The IPT regulations 1994 (SI1994/1774) were pursuant to Part 3 of the Finance Act 1994. The Schedule to these Regulations contains 6 forms to be used by the taxpayer to provide certain information required for the administration of IPT.
Proposed revisions
This measure broadens existing powers in primary legislation (Part 3 of the Finance Act 1994) that will allow forms used in the administration of Insurance Premium Tax to be moved from secondary legislation to a public notice. Subsection (6A) will be inserted in Part 3 of Finance Act 1994 in section 74 (orders and regulations) to permit regulations to refer to Insurance Premium Tax forms in a HMRC notice.
Summary of impacts
Exchequer impact (£million)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
There are expected to be no impacts for individuals, households and families as this measure is an administrative simplification of the process of updating Insurance Premium Tax forms.
Equalities impacts
As this is an administrative simplification of the process for updating forms, it is not anticipated that there will be an impact on those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is not expected to impact on businesses and civil society organisations. This is an administrative simplification of the process of updating Insurance Premium Tax forms and there are no imminent plans to change the forms. Further work to assess the impact will be carried out if any changes to the forms are proposed. HMRC will consult with the insurance industry whenever significant changes to the forms are made.
Operational impact (£million) (HMRC or other)
This measure is not expected to have an operational impact.
Monitoring and evaluation
This measure does not require ongoing monitoring and evaluation because it is an administrative simplification of the process of updating Insurance Premium Tax forms and there are no imminent changes to the forms. HMRC will consult with the insurance industry whenever significant changes to the forms are made.
Further advice
If you have any questions about this change, contact Pete Fontaine Deductions and Financial Services on Telephone:03000 568851 or email: peter.fontaine@hmrc.gov.uk