Reminder: The new standard rate of IPT is now 12% but…

The new standard rate of IPT is due from 1 June 2017 on insurance premiums received on or after that date which relate to risks for which the period of cover under the terms of an insurance contract begins on or after that date.

Premium payments relating to risks for which the cover begins prior to 1 June 2017 that are treated as received prior to 1 June 2018 will be liable to IPT at the old rate.

Premium payments relating to risks for which the cover begins prior to 1 June 2017 that are treated as received on or after the 1 June 2018 will be liable to IPT at the new rate.

For the purposes of applying the rate change arrangements, the date on which the cover “begins” has been confirmed by HMRC as meaning the date at which cover provided by the insurance policy commences, i.e. when the underwriter is on risk – this in most cases may be taken as the date the insurance policy incepts.