Commentary

IPT1 Insurance premium tax

Part V18 Insurance Premium Tax

IPT1 Insurance premium tax

IPT1
Insurance premium tax

December 2020

This notice cancels and replaces Notice IPT1 (March 2019). It applies to supplies made on or after the UK's departure from the EU.

1 Introduction

1.1 What is this notice about

This notice explains:

  1.  

    •     what Insurance Premium Tax (IPT) is, how it applies to insurance contracts and who it affects;

  2.  

    •     how to register for IPT and account for the tax;

  3.  

    •     what to do in the event of a change of rate of tax;

  4.  

    •     what to do if IPT is paid to us in error;

  5.  

    •     the penalties that you may incur if you do not comply with regulations;

  6.  

    •     where to get further advice.

1.2 What's changed

This notice has been updated to reflect changes to IPT following the UK's departure from the European Union

1.3 The legal basis for IPT in the UK

The main law relating to IPT is in the:

  1.  

    •     Finance Act 1994 ss 48-74 and Schedules 6A, 7 and 7A, as amended by the Finance Acts 1997, 1998 and 1999, 2003, 2007, 2008, 2009 and 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 – this is the primary legislation, which establishes the principles of IPT.

  2.  

    •     Insurance Premium Tax Regulations 1994 (Statutory Instrument 1994/1774 – as amended) which gives more details about the operation of the tax.

Other legislation used to define the liability of certain types of insurance and the location of the risk for IPT purposes, is found in the statutory instruments made under the Financial Services and Markets Act 2000, in

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