Is it possible to claim insurance premium tax on my VAT return? IPT and APT are two different concepts. IPT is non-refundable in every case. So, once you have paid this you can not get it back. To know more about this IPT & APT, read the full article below.
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Can one person claim Insurance Premium Tax on the VAT return?
IPT stands for insurance premium tax and VAT stands for value-added tax. Some people confuse these two words while paying tax and applying for the reclaiming of IPT. insurance services never make you pay the vat rate and IPT on the same products. VAT in IPT is different from the general insurance premiums. Here is more about this topic and the answer to the common question “can I claim insurance premium tax on my vat return”? To know more about Insurance tax and value-added tax then read till the very end.
What is insurance premium tax?
IPT is different from VAT in many ways. Insurance premium tax (IPT) is applied to selected goods and services. It has been used in two ways. One for the lower rate of 12% and the other for the higher rate of 20%. Insurance brokers will tell you about this if your insurance policy has IPT to pay. It is the extra amount that you pay. Some of the common policies that have IPT are as follows:
On all the above insurance services you pay the IPT.
Claiming eligibility for the IPT
IPT rate is fixed for almost every policy. You may not even notice this. But if you ask your insurance broker then he will tell you about this. And how they add this to your policy. There are different types of insurance and the IPT containing insurance has different values for every type of insurance. Many of you may not be happy to hear this but the Insurance premium Tax value is non-refundable. Hence it is different and opposite to VAT. so you actually can not claim for the IPT.
How do we pay IPT (Insurance Premium Tax)?
Many of you are unaware of the fact that you pay the IPT with every premium of your policy. Their extra payments are regulated by financial terms. They add the IPT and VAT value to your insurance premiums. Hence you can not separate the extra money and the actual premium money. Hence you do not need to worry about this money.
Disadvantage of VAT
In general, the goal of this concept was to stop the illegal marketing of goods and services. But this has some disadvantages too. VAT increases the overall price of things. Hence normal things become very expensive. So not everyone can afford those. So the price range of the same product increases by 4 to 5% as soon as the VAT is applied to it. And the worst thing is that you can not skip this. Because this is interconnected with the overall value of the goods.
In conclusion, VAT is a different concept than the Insurance Premium Tax. So, do not ever compare these two things. If you want to refund your IPT amount then it is not possible. Because you may not even notice paying this. So it is impossible to reclaim the amount for this. Hence you can not get it back once you paid the insurance premium.