With effect from the 4th January 2011 the Government will be imposing an increase to both the standard and higher rate of Insurance Premium Tax (IPT) and the standard rate of Value Added Tax (VAT) as follows –
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The standard IPT rate will increase from 5% to 6%
- The higher IPT rate (applicable to private travel insurance and some insurance for vehicles and domestic appliances) will increase from 17.5% to 20%
- The standard VAT rate, usually applied to Engineering Inspection policies, will increase from 17.5% to 20%
The new scale will be applied to all new business, renewals and additional premiums where the cover is effective on or after the 04th January 2011. Where there is a return premium, the IPT/VAT will correspond to the rate applied when the policy period commenced.