Please note: This only affects you if you are an insured remover!
I am sure you are well aware the Insurance Premium Tax rate increases from June 1st from 10% to 12%. Once this was announced, back in 2016 we made the necessary internal changes to Move Administer to ease the pain of this increase.
As per the increase from 6% to 9.5% on November 1st, 2015 the following still remains:
Removals
If you invoice your removal customer in May for an May move then the IPT rate is 10%.
If you invoice your removal customer in May for a June move then the IPT rate is 12%.
If you invoice your removal customer in June for an May move then the IPT rate is 10%.
Storage
If you invoice your storage customer in May for May then the IPT rate is 10%.
If you invoice your storage customer in May for May to July then the IPT rate is 10%.
If you invoice your storage customer in May for June then the IPT rate is 12%.
If you invoice your storage customer in June for May then the IPT rate is 10%.
The general rule is that the rate of IPT is decided upon the commencement of the contract and not the date/tax date of the invoice.
Move Administer already has a VAT/IPT Adjustments process on the Tools menu, however, minor tweaks have been made to ensure only the IPT is affected. When the process is executed the IPT rate will increase for all Services, unaccepted Quotations, unaccepted Quotation Services, current Storage and current Self Storage. With regards to Services, Quotations and Quotation Services the totals will be recalculated accordingly.
In October 2015 HMRC confirmed to me that if you are quoting in October for removals taking place in November then you can quote IPT at the new rate of 9.5%, so I don’t see this increase any being different, therefore you can quote for work from June onwards at the new IPT rate of 12%. However, to do this, I would recommend you create a new tax code (Tools -> Options -> Accounting -> Tax Codes) and set the rate at 12%. Your default IPT code will remain at 10%, but if you know the customer is moving on or after June 1st you can change the IPT code from within the quotation itself, also remembering to change it on any additional service you may be charging insurance and therefore IPT.
I hope this helps.
