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TaxRobin
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Is it legal and FCA compliant insurance company to remove

Resolved Question:

Is it legal and FCA compliant for an insurance company to remove a introducing brokers commission from the policyholders premium so that the policyholder pays less insurance premium tax.
Some brokers are suggesting that they will ask their client (policyholder) to pay them a fee and the broker will ask the insurance company to waive their commission in order to avoid the new IPT increase.
The insurer's that I have discussed this with have advised that this is tax avoidance and won't have anything to do with it.
You're advice please
Submitted: 1 year ago.
Category: Tax
Expert:  TaxRobin replied 1 year ago.
HelloThey are correct to take that stand.The fee is part of the policy because the broker is acting as an intermediary. If an intermediary selling insurance subject to the higher rate charges the insured a fee in addition to the amount of premium due under a higher rate contract of insurance, the intermediary may be liable to register and account for IPT at the higher rate on the full amount of the fee charged.You are a taxable intermediary when you charge an insurance related fee.https://www.gov.uk/government/publications/notice-ipt-1-insurance-premium-tax/notice-ipt1-insurance-premium-tax#scope-of-ipt
Expert:  TaxRobin replied 1 year ago.
You may also find the following informativehttps://www.lloyds.com/~/media/files/the%20market/communications/market%20bulletins/2015/08/y4918.pdf
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 13605
Experience: International tax
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Expert:  TaxRobin replied 1 year ago.
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