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 November 1st from 6% to 9.5%. Having been in consultation with Basil E. Fry & Son and HMRC recently, running through a variety of examples, I am pleased to announce that an update to Move Administer will be released on Monday to ease the pain of this increase.
From my consultations I have found the following:
Removals
If you invoice your removal customer in October for an October move then the IPT rate is 6%.
If you invoice your removal customer in October for a November move then the IPT rate is 9.5%.
If you invoice your removal customer in November for an October move then the IPT rate is 6%.
Storage
If you invoice your storage customer in October for October then the IPT rate is 6%.
If you invoice your storage customer in October for October to December then the IPT rate is 6%.
If you invoice your storage customer in October for November then the IPT rate is 9.5%.
If you invoice your storage customer in November for October then the IPT rate is 6%.
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. There will be the odd caveat to be aware of which will be highlighted in our forthcoming instructions.
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.
HMRC have also 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%. Therefore, I would recommend you create a new tax code (Tools -> Options -> Accounting -> Tax Codes) and set the rate at 9.5%. Your default IPT code will remain at 6%, but if you know the customer is moving after November 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 🙂
Perfect information. Nice to see