Who pays it
IPT is charged on the premium. Insurers collect it and pay it to HM Revenue & Customs, so the price you see normally already includes it. Quotes and schedules often show it as a separate line or note.
The two rates
The standard rate is 12% (it has been since June 2017) and applies to most general insurance, including home, motor, pet and most business policies. The higher rate is 20% and applies to travel insurance and certain policies sold alongside goods or services, such as some mechanical breakdown and appliance insurance. Rates can change at Budgets, so check HMRC guidance for current rates.
What’s exempt
Long-term insurance, such as life insurance and income protection, is exempt, as are some other categories including certain commercial ships and aircraft, and reinsurance. That’s one reason life insurance quotes don’t show IPT.
In the US and EU
US states levy premium taxes on insurers, usually built into the price rather than shown to consumers. EU countries set their own insurance taxes, which vary widely and may be shown separately on quotes.
Last updated: 22 September 2026
