Insurance Premium Tax (IPT) is due to increase from 1st November 2015, under measures announced in the recent Summer Budget.
The new standard rate will be due on premiums treated by the legislation as received on or after 1st November 2015, except where insurers operate a special accounting scheme, in which case, the new standard rate is only applied to premiums relating to risks covered by the terms of a contract entered into after 1st November 2015. From 1st March 2016, the new standard rate applies to all premiums, regardless of when the contract was entered into.
Currently the IPT standard rate is 6%. The measure will increase the rate of IPT paid on premiums, which are taxed at the standard rate of IPT by 3.5%, to 9.5%.
We have been aware of increase since the Summer Budget announcement and your Property Manager will have made provisions for this when preparing future service charge budgets.