As many of you will be aware, the Government announced, in the Autumn Statement, that Insurance Premium Tax (IPT) is to increase to 12% from the current rate of 10%.
This will take effect from 1st June 2017. Applicable contracts of insurance have IPT levied on them; similar to VAT, however one of the differences with IPT it that it is simply passed directly to the Government.
The rise will be the third increase by the Government since November 2015 and means that IPT will have doubled from 6% to 12% in less than two years. The latest increase marks the sixth time the rate has been increased since its introduction in 1994.
So you might be wondering what does this mean for you?
As insurance backed guarantees purchased by you are an insurance product, they are affected by this rate increase.
Accordingly we will be working through the pricing tables for each of our insurance schemes and will notify you accordingly of the changes being made over the coming weeks.