IPT Announcement – June 2017 Rate Change
The standard rate of Insurance Premium Tax (IPT) will rise by 2% from 10% to 12% with effect from 1st June 2017.
The Government announced in the November budget that it would be increasing the current standard rate of Insurance Premium Tax (IPT) by 2% to the new rate of 12%. This change is now fully enacted in law and affects transactions from 1st June 2017.
This increase will primarily affect any cases where ATE insurance is taken out after 1st June 2017; however there may be some impact upon cases which are currently insured, especially where it is likely that we will not receive premium payment before 1st June 2018.
Below are some important scenarios to take note of:
- Any premiums settled by 1st June 2017 will not be affected by this change.
- Any premiums raised from 1st June 2017 onwards will attract the new rate of 12%. This will include revised premiums under the single fee structure and additional stage payments under the staged fee structure
- Any premiums currently insured where DAS Law Assist, or our representatives, do not receive payment of the premium from the insured party’s representatives, before 1st June 2018 will be reissued at the point of settlement with the new rate of 12%.
- Premiums issued prior to the 1st June 2017 and paid by the insured party’s representatives, to DAS Law Assist, or our representatives, prior to 1st June 2018, will retain the lower rate originally applied to them.
For any ATE premiums issued before 1st June 2017, as and when you feel that it is more likely than not that the premium receipts will not be paid by 1st June 2018, please ensure your clients are aware that the IPT applied to the premium charged will be increased to 12% for receipts banked by you from 1st June 2018.
If you have any queries regarding the impact of the IPT increase please do contact one of our Case Management Team Leaders or your Solicitor Account Manager on 0370 241 1345.