Insurance Broker, Cheaper Rates - Direct Insurance Group

Direct Insurance Group has welcomed the government’s decision to water down its controversial clampdown on IPT (insurance premium tax).

Under revisions to the draft legislation announced in November’s Pre-Budget Report, IPT will be charged on intermediary fees only under certain specific conditions. The administration and arrangement fees charged by brokers for individually rated products including conventional motor and household insurances should generally fall outside the IPT net. The revisions significantly narrow the scope of the revisions to IPT.

Steve White, Biba's head of compliance and training, said: “We are pleased that HMRC has reconsidered the effects of its draft legislation and, that following the joint efforts of Biba and the IIB, has largely accepted our suggested amendments. This is the result of lengthy and delicate negotiations and represents what we believe to be the best possible result for the intermediary sector”.

The government’s motivation for the change in IPT legislation is to prevent ‘premium splitting’ whereby administration fees are separated from the premium in order to avoid IPT – a problem exposed by the ‘Homeserve’ case in the Court of Appeal. The new measures will come into effect with immediate effect.

Direct Insurance will be ensuring that the cost saving on all Motor Fleet Policies, Commercial Property and all relevant policies managed by us are passed on to our clients. Is your Insurance provider doing the same?