Your guide to Insurance Premium Tax


You may have seen increasingly more of the term ‘Insurance Premium Tax’ or ‘IPT’ over the last year, but what does the term mean and how does it affect you?

The low down…

Insurance Premium Tax was first introduced in 1994 by HM Revenue & Customs. Simply put, Insurance Premium Tax is the insurance world’s equivalent to VAT and is a tax that is added on to general insurance premiums, including home insurance, car insurance and travel insurance. IPT is added to insurance in the same way that VAT is added onto most goods and services in the UK, it is in no means, an additional cost charged by the insurance provider to get more money. It is, however a legal requirement added by the UK government.

There are two separate rates of IPT; standard rate & a higher rate, which rate is added to your quote price is dependent upon the insurance type that you are purchasing.

Standard Rate

Insurance Premium at the standard rate is 12%. This is applied to pet, mobile, motor, contents, buildings and private medical insurance policies.

Higher Rate

Insurance Premium Tax at the ‘higher rate is charged at 20%, this is applicable for insurance products such as travel, medical, electrical appliances and some vehicles.



Why does IPT keep going up?

We know that the hikes in the price of IPT will annoy many people, but it is worth noting that the UK rate of 12% will still be lower than many EU countries. And not only that but it is unfortunately, unavoidable and after all, there is a much higher price to pay if you choose to drive uninsured.


Share this article
Share on facebook
Share on google
Share on twitter
Share on linkedin

We’re currently experiencing a high volume of calls into our contact centre and whilst we are doing our very best to maintain service levels, we ask that you only call our contact centre if absolutely necessary so we can keep our phone lines available  for vulnerable customers and those who don’t have access to online services.

If you need to check any details or make a change to your policy, please  log in to your Self-Service Centre. It will be much quicker for you to make changes to your policy online at the moment. Once logged in, you can also use our Webchat service which is available Monday- Saturday 8am-6pm and Sunday 10am-4pm to make changes, accept or decline your renewal or if you need to let us know about a claim. To log in, please click here.

We also have some other information that may be useful. Click here to read our FAQ’s, and information on what we are doing to support key workers can be found here.