In the 2015 budget, the Government announced an increase in the rate of Insurance Premium Tax (IPT) from 6% to 9.5%.
What does it mean for you:
IPT applies to the majority of insurance policies. With effect from 1st November 2015, any new policy, renewal of an existing policy or mid-term adjustment to a policy IPT of 9.5% will apply instead of the current 6%. The change affects your home, pet and motor policies. Travel insurance is an exception as this already attracts a higher rate of 20%.
IPT was first introduced in October 1994 and while it is a tax paid by insurers, it is added to the insurance premium paid by the customer. It last rose in January 2011 when it increased from 5% to the current 6%.