General insurance premiums are subject to an indirect tax called Insurance Premium Tax. This page lists current IPT tax rates in the United Kingdom.
IPT TAX RATE: UK government first introduced the Insurance Premium Tax in the early 90s.
They used the November Budget in 1993 to raise extra revenue from the insurance sector.
As a rule the Insurance Premium Tax (IPT) gets included in the price paid when you buy general insurance.
Note: United Kingdom Value Added Tax does not apply to any insurance premiums.
The type of insurance and the supplier determines the rate of Insurance Premium Tax. There are two basic types of IPT - Standard Rate and Higher Rate.
The standard rate of IPT on the vast majority of insurances is 12%. This includes things like car insurance and insurances for the home. The standard rate IPT also applies to pet insurance.
The IPT higher rate of 20% applies to travel insurance. The higher rate also applies to insurance organised by a supplier (not the insurance company) on things like:
Note: There is no IPT due on policies of income protection insurances or life insurance.
Insurance Premium Tax Rate in the United Kingdom