The Association of British Insurers (ABI) is reporting that HMRC
are willing to permit the submission of estimated IPT (
Insurance Premium Tax) returns if insurers are experiencing
issues implementing the forthcoming UK IPT standard rate increase
(to 9.5%). An insurer may be experiencing issues with updating IT
systems ahead of the increase, for example. The estimated returns
can only be submitted if an insurer has prior agreement with HMRC
on an individual basis. Adjustments to these estimated returns will
be made at a later date.
David Jordorson, Policy Advisor on Taxation at the ABI, said:
"Firms had no advance warning of the increase in Insurance
Premium Tax announced in the Budget, meaning preparations for the
implementation date of November 1st have placed sudden pressure on
IT and back-office services.
"The ABI has been able to meet with HMRC and Treasury
officials to explain the challenges being faced by insurers having
to implement this change at relatively short notice. Allowing the
use of estimated returns is a pragmatic response which should go
some way to easing the transition for insurers."
Alongside the transitional arrangements for insurers filing UK IPT
under the special accounting scheme, this news illustrates that
HMRC are attempting to make the rate increase a smoother process
for insurers than the last rise in January 2011, where insurers
faced significant challenges to update their systems in time. The
relatively short notice of this rate increase, on the other hand,
provides its own challenges.
If an insurer has concerns over the upcoming rate increase and its
effect on their reporting of UK IPT, they should contact HMRC to
discuss the situation. TMF Group are assisting insurers with
preparations for the rate increase and are able to offer advice to
our clients as needed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
