The Insurance Premium Tax Regulations 1994

Explanatory Note

(This note is not part of the Regulations)

These regulations make provision for the administration and control of insurance premium tax, including provisions relating to tax representatives and insured persons who may be required to account for tax.

In particular:

• Part I includes definitions of expressions used in the Regulations.

• Part II regulates the registration of insurers, changes to the register and removal from the register of insurers who cease to receive premiums. It also makes special provision for transfers of a going concern, Lloyd’s syndicates, partnerships and other unincorporated bodies and relating to the death, bankruptcy or incapacity of registered persons.

• Part III deals with accounting for tax by making returns, the correction of errors, payment of the tax and retention of records.

• Part IV deals with claims and payments in respect of credits where tax has been paid and the premiums are repaid in whole or in part.

• Part V establishes a special accounting scheme under which insurers who notify their intention to use the scheme account for tax when premiums are written in their accounts instead of when they are received. It also provides for cases where the amount of premium written differs from the amount of premium received or to be treated as received, for withdrawal or expulsion from the scheme, and how tax is to be accounted for on ceasing to use the scheme.

• Part VI deals with the notification by the Commissioners of certain information or directions relating to tax representatives and the registration alongside the name of an insurer of the name of any tax representative of his, and provides that the tax representative has no obligation as regards his insurer’s notification of liability to register or deregister.

• Part VII makes provision for the issue of tax liability notices on insured persons where the insurer has no UK establishment and no tax representative, and the issue of assessments, payment of tax and retention of records in such cases. It also provides for the payment of interest by the insurer to the insured where he is liable to reimburse the latter for tax which has been recovered under this Part.

• Part VIII provides for distress, or diligence in Scotland, to be levied in respect of tax debts.