As a part of the Government’s 2016 Budget, Insurance Premium Tax (IPT) is set to rise by 0.5%, changing the rate from 9.5% to 10%.

The Government has specified that the income generated by the rise in IPT will be put towards funding flood defence and resilience.

What is IPT?
IPT is a tax levied on certain insurance policies (Pet, Mobile, Car, Building, Contents & PMI) which is usually passed on to the consumer through the price of their policy. The government predicts this will lead to a rise of between &1-&2 on the average policy.

Who will this affect?
All Insurance Brokers and Insurance Providers who sell non-exempt insurance policies will be affected by the raise, as will all households and businesses purchasing non-exempt insurance.

How will 0.5% make an impact?
By 2021 the raise in IPT is expected to have generated an extra &210 million, all in the aid of improving flood defences, an issue that the government has been under fire for in recent years.

Economic impact?
The government does not believe the rise will have a negative impact on any providers, brokers or customers, however this remains to be seen.