Free Insurance Premium Tax calculator
What does IPT add to your client's premium?
Add the covers and see Insurance Premium Tax at 12%, 20% or exempt, line by line, with the total to pay. Then send the client a branded breakdown.
Example figures. Change them to your client's.
1When does the policy start?
2The covers
First, a guess
On these covers, how much does Insurance Premium Tax add on top of the premium?
Illustrative only, not advice. The policy wording and the insurer decide. Nothing you type leaves your browser unless you make the PDF.
Why it matters
A tax every business pays and can't get back
12%
standard rate of Insurance Premium Tax on most business insurance, unchanged since 1 June 2017.
GOV.UK, Insurance Premium Tax rates20%
higher rate on travel insurance and some cover sold with vehicles and appliances.
GOV.UK, Insurance Premium Tax rates
In plain English
Insurance Premium Tax in three points
Simpler than the Australian stack, but just as easy to forget when quoting.
12% on most covers
Property, liability, motor fleet, cyber and the rest of a commercial programme take the standard rate.
20% on a few
Travel insurance takes the higher rate, as does cover sold with vehicles and electrical goods.
It can't be reclaimed
IPT is not VAT. A VAT registered business cannot get it back, so it is part of the real cost of cover.
Know the rules
Three things worth telling clients
- 1
IPT is on the premium, not the fee
Insurance Premium Tax is charged on the premium. A broker fee charged separately carries VAT rules of its own, not IPT.
GOV.UK, Insurance Premium Tax - 2
Some risks are exempt
Commercial ships, reinsurance, most long term insurance and risks located outside the UK are exempt.
GOV.UK, Insurance Premium Tax - 3
Budget for it
Because it cannot be reclaimed, quote totals including IPT so the client budgets for what they will pay.
GOV.UK, Insurance Premium Tax rates
The client PDF
A one page breakdown, on your letterhead
Your logo and details, each cover's premium and IPT, the rate applied and the total to pay. It answers the question before the client asks it.
- Premium, IPT and total, cover by cover
- The rate applied to each
- What can't be reclaimed
- Your branding
Where your premium goes
- Premium
- £19,500
- Insurance Premium Tax
- £2,340
Rates as at 1 November 2026. Your invoice is the final word.
Test yourself
Insurance Premium Tax: five quick questions
Clients ask why the invoice is bigger than the quote. See how sure you are of the answers.
What is the standard rate of Insurance Premium Tax?
Questions brokers ask
Insurance Premium Tax, answered
- What rate of IPT applies to business insurance?
- The standard rate of 12% applies to most business insurance. Travel insurance and some cover sold with vehicles and appliances take the higher rate of 20%.
- Can a business reclaim IPT?
- No. Unlike VAT, Insurance Premium Tax cannot be reclaimed, so it is a real cost to the business.
- Is IPT charged on a broker fee?
- Insurance Premium Tax is charged on the premium. A broker fee charged separately is shown on its own line here, without IPT.
- What is exempt from IPT?
- Commercial ships, reinsurance, most long term insurance and risks located outside the UK, among others. HMRC's guidance has the full list.
- Is this tax advice?
- No. It applies the published rates to the figures you enter. The insurer's invoice is the final word.
- Is my client's data stored?
- No. The calculator runs in your browser. Figures only leave it if you make the PDF, which goes to our report builder to print.
With a free trial
Every quote taxed correctly, without the spreadsheet
Coverbound works out IPT on every line of every placement and puts it straight into your quotes and renewal reports. 14 days free, no card.
Answer the invoice question before it's asked
Two minutes now saves the phone call later.
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