IPT07855 - Accounting for Insurance Premium Tax: transitional accounting arrangements: rates of tax
Rates of tax
- 1 October 1994 - IPT introduced at single rate of 2.5%.
- 1 April 1997 standard rate increased to 4%. Higher rate introduced at 17.5% on certain types of insurance sold in specified circumstances to cover motor vehicles, domestic appliances and travel.
- 1 August 1998 - higher rate extended to all travel insurance, regardless of provider.
- 1 July 1999 - standard rate increased to 5%.
- 4 January 2011 - standard rate increased to 6%, higher rate increased to 20%.
- 1 November 2015 - standard rate increased to 9.5%.
- 1 October 2016 - standard rate increased to 10%
- 1 June 2017 - standard rate increased to 12%.
Tax fractions
The fractions for extracting IPT from a tax inclusive premium are:
Rate of tax | IPT fraction |
---|---|
2.5% | 1/41 |
4% | 1/26 |
5% | 1/21 |
6% | 3/53 |
17.5% | 7/47 |
20% | 1/6 |
9.5% | 19/219 |
10% | 1/11 |
12% | 3/28 |