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• # 102512
• Wed 05 Nov 2014 10:23 AM

Hi Everyone,

Has anyone come accros Insurance Premium Tax?  My client has been charged this - which I have found out through HMRC, is correct, however I am strugling to understand whether is tax allowable?  the client uses Xero, and there is a drop down box to account for it, which feeds into the VAT calculation suggesting it can be reclaimed via VAT - but I have had not experience of this, and I have not seen any lines on the VAT return to reclaim it, so I am a bit confused.

If Anyone has experience and can help I shall be grateful.

Jane TFMC

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• # 102518
• Wed 05 Nov 2014 02:59 PM

Hi Jane,

Insurance Premuim Tax is definitely not recoverable through Vat.

It is an unfortunate choice of name saying it is aTax but it just gets charged as an expense along with the Insurance.

Marilyn

• A clever person solves a problem.

  A wise person avoids it.

  Albert Enstein

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• # 102525
• Wed 05 Nov 2014 08:10 PM

Hi Jane,

Just to add to Sharon and Marilyn's answers, insurance is VAT exempt, which means IPT is too  (can't have a tax on a tax !)

All you need to do is post the gross value of the charge received to insurance. This then feeds through to VAT Return box 7 for reporting purposes.

• Kind regards,
  PeteL  

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