Can I claim Insurance Premium Tax on my VAT Return? The short answer? No, you can’t reclaim Insurance Premium Tax (IPT) on your Value Added Tax (VAT) return. But if you paid out IPT on your purchases and sales of business-related insurance, you can claim this back via the tax return form you file at the end of the year with HMRC’s Self Assessment department.
1 – Can I Claim Insurance Premium Tax Back On My Taxes?
In short, no. Businesses that trade in goods and services cannot reclaim IPT, whether it’s their only business or part of a wider portfolio. If you operate under a sole trader or partnership structure, you will also not be able to reclaim insurance tax against your profits either.
Can I claim Insurance Premium Tax on my VAT Return? What do you need to consider if you use your car for business purposes though? If your company owns any vehicles and claims back any mileage costs on them then there is a chance that some of those costs can be reclaimed as part of your normal corporation tax returns but not IPT.
2 – What Is Insurance Premium Tax?
Put simply, IPT is a tax that’s payable by insurance companies and certain businesses that sell insurance. It doesn’t apply to individuals. The rules governing how much IPT can be charged vary from country to country, but in essence, they’re similar: they relate to insurance premiums collected or charged by sellers in respect of non-life and non-health insurance business written.
Can I claim Insurance Premium Tax on my VAT Return? That last bit – non-life and non-health – is important because, despite what you might expect, policies covering business equipment such as computer hardware aren’t taxable under IPT rules. It’s also worth noting that while private health care is usually exempt from most types of business taxes like Vat, it isn’t always free from IPT.
3 – Do I Have To Pay Insurance Premium Tax When Setting Up A Business?
In all likelihood, no. Many start-ups don’t even qualify for IPT because of their size and income (or lack thereof). For example, most businesses below a certain annual turnover do not have to pay IPT. You can find out if you need to register for IPT here. If your business is part of a small or medium enterprise, chances are you will not be liable for IPT at all.
4 – Do We Have To Pay Insurance Premium Tax In Our Freelance Work?
Can I claim Insurance Premium Tax on my VAT Return? The short answer is no. You will have to pay 20% Corporation Tax on your freelance earnings, but you don’t have to include insurance premium tax (IPT) when calculating your freelancing profits for Corporation Tax purposes. Freelancers and sole traders can reclaim insurance premium tax (IPT) as an allowable expense against their income.
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