Insurance Premium Tax Explained

If you have pet, motor, mobile, contents, buildings or private medical insurance, then there’s a good chance you’ll see an increase on these premiums.

The rate of the standard IPT is the same for all policyholders, as it’s a percentage of their premium. However, the 12% rate works out significantly higher, in monetary terms, for people that are already paying higher prices. This means young drivers are hit the hardest.

There’s no denying that the 12% IPT will annoy many people, but it’s also unavoidable. So, whatever you do, don’t be tempted to drive without insurance.

If you’re caught behind the wheel of a car that you’re not insured to drive, the police can give you a fixed penalty of £300 and six penalty points. And, if the case goes to court, you may also be given an unlimited fine and be disqualified from driving.

Plus, the police also have the power to seize and destroy the vehicle that’s being driven uninsured.

There’s been a lot of talk about Insurance Premium Tax, and that’s mostly because it keeps rising.

After a series of increases – the most recent in June 2017 – the standard rate now sits at 12%.

It’s easy to push Insurance Premium Tax to the back of your mind, but it’s important you know what it is and how it affects you.

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