IPT – What is it, and why must I pay it?
August 15, 2025
IPT – What is it, and why must I pay it?
IPT (Insurance Premium Tax) is a tax on general insurance premiums that the UK government requires insurers to charge. Think of it like VAT but specifically for insurance policies.
The insurer adds IPT to your premium before any other charges, and the total amount appears on your insurance documents. You cannot opt out of paying IPT if you want insurance coverage, as it's built into the cost of all eligible insurance products sold in the UK.
The standard rate is 12% and applies to most general insurance policies, including:
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Car insurance
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Home insurance
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Pet insurance
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Private medical insurance
A higher rate of 20% applies to travel insurance, mechanical/electrical appliance insurance, and some vehicle insurance.
It is a legal requirement—insurers have been obligated to collect this tax on behalf of the government since 1994.
