T: 0207 199 6610     E: info@guardhog.com
T: 0207 199 6610     E: info@guardhog.com

Understand Insurance Premium Tax in 5 quick steps

Incoming Piggy Traffic? Itchy Pig’s Trotter? Impolite Pig Treatment? Sadly IPT has nothing to do with our favourite subject (pigs), and everything to do with our least favourite (tax). But what exactly is it? Read on, and in five steps, you’ll be an expert…


  1. So IPT is a tax – on what, exactly?

Insurance Premium Tax is levied on all general insurance premiums in the UK and ultimately paid by the ‘insured party’ – in other words, the home owner, car owner, person going travelling etc. It’s most akin to VAT, for which all general insurance products remain exempt.


  1. How long has IPT been around?

It was introduced in the 1990s and has remained at a fairly consistent level since then, until a step change was announced by the Government to come into effect in November 2015. This was the first in a series of increases that will see the tax double from 6% to 12% in under two years, as shown below:

  • 1 April 1997 to 30 June 1999 – a standard rate of 4%
  • 1 July 1999 to 3 January 2011 – a standard rate of 5%
  • 4 January 2011 to 31 October 2015 – a standard rate of 6%
  • 1 November 2015 to 30 September 2016 – a standard rate of 9.5%
  • 1 October 2016 to 31 May 2017- a standard rate of 10%
  • From 1 June 2017, the standard rate increases to 12%


  1. What does this mean for consumers?

IPT is believed by many to be a ‘soft touch’ in terms of increasing tax revenues given the legal (and quasi-legal) requirement for people to buy these products. And many feel it’s inevitable that the gap between VAT and IPT will continue to close over time.


  1. Is this fair?

We don’t think so. At GUARDHOG, we believe these increases have been too harsh and are simply unfair on consumers – especially at a time when the world is just getting comfortable with the concept of ‘sharing’ through platforms like Airbnb, Fat Lama and many others. Insurance products like ours are proving to be key in building trust to support continued growth of this amazing sector and this increase in cost doesn’t help.


  1. What is GUARDHOG doing about it?

We are going to absorb 100% of the IPT increase for our customers. So they won’t see any rate increases for the year from when the IPT increase comes into effect. We want our customers to be treated fairly: it’s one of the many ways GUARDHOG is different from the rest of the insurance market.

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