How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TaxRobin Your Own Question
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17645
Experience:  International tax
Type Your Tax Question Here...
TaxRobin is online now

Is it legal and FCA compliant insurance company to remove

This answer was rated:

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
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.
You may also find the following informative
TaxRobin and other Tax Specialists are ready to help you
After you view my response, please post if you need more information or if you need no further clarification a positive rating is appreciated.
I know rating takes an additional step and I truly appreciate it when you take the extra time!