Policy paper on planned increase in Insurance Premium Tax

HMRC has published a policy paper explaining that legislation will be introduced in Summer Finance Bill 2015 to amend the Finance Act 1994, Part III, section 51 to change the standard rate of IPT. The new standard rate will generally be due from 1 November 2015, with an exception for those insurers who use a special accounting scheme rather than the cash receipt method.

The exception operates to require the new standard rate to be applied by them only to premiums received on or after 1 March 2016, where the premium relates to risks covered by the terms of a contract entered into before 1 November 2015.