The Chancellor's budget included changes to the rate of Insurance Premium Tax (IPT) - the standard rate increasing from 6% to 9.5% from 1st November 2015.
This means that the majority of law firms will NOT face a tax increase on their premiums this year, but should be prepared for the increase next year.
Speak to your usual Lockton contact to discuss the implications for your business.
We can help you:
- review your insurance programmes;
- mitigate the impact of the increase; and
- comply with HMRC's anti-avoidance rules for artificial arrangements.
For example, extending your policy term simply to delay the rate increase would be subject to HMRC's anti-avoidance rules meaning that the new, higher rate of tax would apply to any extended term after 1 November 2015. However, taking out a longer policy prior to 1st November for genuine commercial reasons such as price certainty could mean that the whole policy would be subject to the lower IPT rate.
There are, of course, a number of other factors to consider before changing your policy term/renewal date.
If you are not already a Lockton client, and are seeking an alternative quote, Lockton have access to exclusive insurance markets for firms of ALL sizes. To discuss this, or any other aspect of your insurance arrangements, please contact us.