Chancellor Rishi Sunak has kept Insurance Premium Tax (IPT) at the same rate – 12% - in his Autumn budget document, delivered 27 October.
UK Government borrowing is the “highest it has been outside of war time”, the Chancellor warned, following Spring 2020’s so-called “Coronavirus budget” and the costs of lockdown.
The Government reaffirmed doubling of investments in the Flood and Coastal Erosion Risk Management (FCERM) programme. This £5.2bn investment is meant to better protect 336,000 properties across England from flooding.
There will be a National Infrastructure Commission study of the effective management of surface water flooding in England. An additional £27m was committed to support flooding incident and emergency response activities, and an additional £22m per year to maintain flood defences.
Location of risk criteria
The UK Government has said it will relocate the criteria for determining the location of risk for IPT into IPT legislation, ensuring risks located outside the UK remain exempt from UK IPT.
This takes the form of a technical amendment to the Finance Bill 2021-22 draft legislation announced in July 2021, to set out these criteria.
The amendment covers risks concerning buildings and their contents, and ensures the location of risk continues to be in the country in which the building which the contents are housed is situated, whether or not the contents are covered by the same policy.
HMRC will update its IPT guidance for identifying where a risk is situated, particularly around the definition of establishment for which feedback has highlighted the guidance has not kept up with developments in case law.
The Government said: “This will provide clarity, as well as ensuring that the risks located outside the UK remain exempt from UK IPT. Following a technical consultation on the draft legislation, amendments were made to ensure continuity of treatment.”
More information from the UK Government is available online, here.