Daily briefing

Insurance Premium Tax: 12% on Every Policy

Insurance Premium Tax (IPT) is applied to most general insurance policies sold in the UK — including car, home, pet, and private medical cover. It is charged at a standard rate of 12%.

Because IPT is calculated on the premium before fees, households with multiple policies can pay hundreds a year in tax alone — on top of the underlying risk price.

When premiums rise after storms, thefts, or medical inflation, the IPT bill rises too — even if the tax rate itself stays constant.