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Insurance Premium Tax (IPT)

The standard rate of Insurance Premium Tax (IPT) has increased from 6% to 12% in less than 18 months and independent experts say that costs per-household are set to rise above £200 in 2018. IPT applies to the vast majority of policies sold, whether for motor, property, health or pet cover – for businesses and individuals.

The ABI is urging Chancellor Philip Hammond to end the repeated increases in Insurance Premium Tax (IPT).

James Dalton, Director of General Insurance Policy at the Association of British Insurers (ABI), said:

“Taxing insurance premiums means punishing people who do the responsible thing. No-one would think it reasonable to fine people for clearing up after their pets, securing their homes or driving carefully. It is no more acceptable to penalise people who sensibly invest in insurance cover for themselves, their families and their belongings. Repeatedly putting up Insurance Premium Tax impacts hardest on the poorest and it’s time for the Chancellor to end this raid on the responsible and commit to no further increases this Parliament.”

The table below shows the additional cost of the IPT increases from 6% to 12%:

The UK has the 6th highest level of Insurance Premium Tax in Europe. 

The standard rate of Insurance Premium Tax (IPT) in the UK is now the 6th highest in Europe, behind only Germany, Greece, Italy, the Netherlands and Finland, analysis from the Association of British Insurers (ABI) shows. 

The impact of Insurance Premium Tax on UK households

Independent report by Social Market Foundation on the wider impact of IPT.

ABI Head of Comms Anthony Wright blogs on IPT vs the pasty tax.

One of the more striking findings in the Insurance Premium Tax (IPT) report the Social Market Foundation published last week, was the finding that half the country had never even heard of it. 

Previous press releases: