Insurance Premium Tax (IPT) is charged at 5%. This rate applies to all general insurance such as cars and homes. Life assurance and other long term insurance remains exempt, though there are anti-avoidance rules surrounding long term medical care policies.

A higher rate (17.5%) of IPT applies to certain categories of insurance, as an anti-avoidance measure. This higher rate of IPT applies to insurance sold by suppliers of specified goods and services e.g. mechanical breakdown insurance, travel insurance irrespective of who is supplying the insurance, and insurance when sold with TV and car hire.