Insurance Premium Tax (IPT) Calculator UK 2026
Calculate Insurance Premium Tax (IPT) on UK insurance policies. Standard rate 12%, higher rate 20% for certain insurance types. Instant IPT calculation.
Frequently Asked Questions
What is Insurance Premium Tax in the UK?
IPT is a UK government tax on general insurance premiums. The standard rate is 12%, applied to most insurance including home, car, and pet insurance. A higher rate of 20% applies to some travel insurance and mechanical or electrical appliance insurance.
Is life insurance subject to IPT?
No. Life insurance, permanent health insurance, commercial ships and aircraft insurance, and export insurance are exempt from IPT.
How do I work out IPT on a gross premium?
To extract IPT from a gross premium at 12%: divide by 1.12 to get the net premium, then subtract. For 20%: divide by 1.20. For example, £560 gross at 12% = £500 net + £60 IPT.
Can businesses reclaim IPT?
No. Unlike VAT, IPT is a cost to the insured and cannot be reclaimed as input tax. It is a true cost that must be absorbed by the policyholder.
Has IPT changed recently?
The standard rate was raised from 6% to 9.5% in 2015, then to 10% in 2016, and to 12% in 2017 where it has remained. The higher rate of 20% has been in place since 1997.