Insurance Premium Tax

Mark Chesham has specialised in advising businesses in the financial services and insurance sectors for nearly 25 years. He started with HM Customs and Excise, working in a specialist insurance team, before spending 15 years in two of the 'Big 4' accounting firms. He set up his own consultancy practice in 2005 and is now Director of Indirect Tax Services at Moore Stephens. He is a member of the Chartered Insurance Institute and the VAT Practitioners Group.

• INTRODUCTION1.1. Sources of informationWHAT IS INSURANCE PREMIUM TAX2.1. Definition2.2. Is IPT legal?2.3. Insurance contracts and insurers2.4. Taxable contracts2.5. What is a premium?2.6. Coinsurance, insurance pools and fronting2.7. Warranties and guarantees2.8. Discretionary trusts2.9. Cost plus schemes2.10. Self insurance2.11. Voluntary excesses and deductiblesHIGHER RATE IPT3.1. Introduction3.2. Motor cars and motor cycles3.3. Domestic Appliances3.4. Travel insurance3.5. Higher rate insurance and free and discounted insuranceTAXABLE INTERMEDIARIES4.1. Liability to register and account for IPT4.2. Criteria for a person having to register4.3. Taxable intermediary provisions4.4. Higher rate contracts4.5. Registration limitsLOCATION OF RISK5.1. Introduction5.2. Risk location rules5.3. Habitual residence5.4. Business establishment5.5. Unregistered vehicles5.6. Buildings5.7. Embassies5.8. Travel Insurance5.9. Apportioning multi jurisdictional risksEXEMPTIONS6.1. Introduction6.2. De minimis6.3. Exemptions6.4. Non-UK risks6.5. Reinsurance6.6. Long-term insurance contracts6.7. Commercial ships6.8. Contracts relating to the Channel Tunnel6.9. Lifeboats and Lifeboat equipment6.10. Commercial aircraft6.11. International railway rolling stock6.12. Goods in foreign or international transit6.13. Export finance related insurance6.14. Motability contracts6.15. SpacecraftREGISTRATION, DE-REGISTRATION AND TOGCS7.1. Registration – Introduction7.2. Deregistration7.3. Transfer of a going concernACCOUNTING FOR IPT8.1. Introduction8.2. IPT Accounting Schemes8.3. Bad debt relief8.4. Adjusting for errors on IPT returns8.5. Changes in IPT rates8.6. Anti-forestalling provisions8.7. Lloyd's IPT procedures8.8. Record keeping requirements8.9. Recovering IPT paid in errorPENALTIES9.1. Introduction9.2. Penalty for failure to notify9.3. Late payment of tax or rendering of returns9.4. Failure to notify a cessation of trade9.5. Failure to produce records9.6. Failure to appoint or nominate a tax representative9.7. Breach a controlled goods agreement or Walking Possession Agreement in Northern Ireland9.8. Liability of insured9.9. Underdeclarations9.10. Evasion of IPT9.11. Interest9.12. HMRC's stated approach to late rendering and payment penalties9.13. Security9.14. Reviews and appealsAPPENDIX 1: HMRC PENALTIES FOR FAILURE TO NOTIFY (FACTSHEET CC/FS11)APPENDIX 2: HMRC PENALTIES FOR INACCURACIES IN RETURNS (FACTSHEET CC/FS7A)APPENDIX 3: ""CONNECTED"" PERSONSAPPENDIX 4: FORMSAPPENDIX 5: EUROPEAN INSURANCE PREMIUM TAX (IPT) COMPARISON TABLEAPPENDIX 6: IPT ERROR FLOWCHART