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HSB Engineering Insurance’s approach to Insurance Premium Tax (IPT) changes

Following July’s Budget announcement, with effect from 1 November 2015 the rate of Insurance Premium Tax (IPT) will increase from the current rate of 6% to a new rate of 9.5%. From the effective date, HSB Engineering Insurance will be implementing the IPT rate changes to its business transactions as outlined.

 

New business and renewals

Effective from 1 November, the new rate of 9.5% will apply to all new policies and renewals.

 

Mid-term adjustments

In line with guidance for insurers using the Special Accounting Scheme (SAS), up to and including 29 February 2016 the insurance policy commencement date will determine the rate of IPT applied to additional premiums and return premiums processed.

 

From 1 March 2016, all transactions (other than return premiums) will attract the new IPT rate of 9.5%, irrespective of policy commencement date. Return premiums will attract the IPT rate applied to the original policy.

 

The following table shows how the IPT rates will be applied by HSB Engineering Insurance:
 

Insurance policy commencement date

Transaction

IPT rate applied until 29 Feb 2016

IPT rate applied from 1 March 2016

Before 1 November 2015

Premium increases – e.g. additional premiums

Old rate (6.0%)

New rate (9.5%)

Premium decreases – e.g. return premiums, cancellations

Rate of original policy

IPT rate previously applied

On or after 1 November 2015

Premium increases – e.g. additional premiums

New rate (9.5%)

New rate (9.5%)

Premium decreases – e.g. return premiums, cancellations, etc

Rate of original policy

Rate of original policy



If you have any questions about the IPT rate change, please contact your local HSB Engineering Insurance office.


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