What is IPT?
IPT is short for Insurance Premium Tax. It can be likened to VAT as its added to the total price of your insurance premium
Why do I pay it?
The UK government introduced IPT in the early 1990s, it “believed” the UK insurance market was an under taxed as it wasn’t subject to VAT.
So what have been the increase’s since its introduction?
Here is where you should be concerned – (standard IPT rates)
- 1994 2.5%
- 1997 4%
- 1999 5%
- 2011 6%
- 2015 9.5%
- 2016 10%
- 2017 12%
*Some insurance types are exempt from IPT*
Can you see why this is alarming? In the last 6 years we have seen IPT rate double and I fear this trend will continue for some time to come.
You can try and offset the IPT rate change by shopping around at your renewal- find a better deal than your current insurance provider and you could be saving more than the 2% increase on IPT.