Insurance Premium Tax is a form of tax that must be added to all general insurance premiums within the UK. The most common form of tax, VAT, is not applicable on insurance, instead the government require you to pay IPT (as it is also known) instead. This amount is collected by us but passed to HMRC. The main law relating to IPT is in the Finance Act 1994.

What is the IPT rate?

The current IPT rate for most insurance policies, including all of the policies sold by us, has been set by the government at 10% but this is due to rise to 12% on the 1st June 2017 following last year’s Budget (there is a higher rate of 20% which applies to some other types of insurance such as travel insurance). All our quotes and invoices will always include the IPT amount. If your policy attracts both rates for different sections of cover we will apply the correct rate per section.

Can I claim back IPT?

The simple answer is no – IPT is different to VAT and cannot be reclaimed. For further information visit

Are there any exemptions?

Some examples of exemptions include:

Insurance for risks outside the UK i.e. overseas holiday homes
Insurance on commercial goods in international transit
Commercial aircraft insurance
Commercial ships and lifeboats insurance