Once again an Insurance Premium Tax increase is due to take affect from the 1st October 2016, under measures announced in the recent Government Spring Budget.
The Insurance Premium Tax (IPT) new standard rate will be due on premiums treated by the legislation as received on or after 1st October 2016, except where insurers operate a special accounting scheme. From 1st February 2017, the new standard rate applies to all premiums, regardless of when the contract is entered into.
Currently the IPT standard rate is 9.5%. The measure will increase the rate of IPT paid on premiums, which are taxed at the standard rate of IPT by 0.5%, to 10%. This is in addition to the increase experienced in 2015 which saw IPT increase from 6.5% to 9.5%.
We have been aware of the increase since the Spring Budget announcement and your Property Manager will have made provisions for this when preparing future service charge budgets.