Is Business Insurance inclusive of VAT?

  • 2 Min Read
  • IPTTaxVAT
We break down the details of how tax works on business insurance, and what it means for your business.

When it comes to business insurance, VAT is not applicable, instead there is an insurance premium tax (IPT) on general insurance premiums. There are two rates:

Standard Rate:  12.0%
Higher Rate:   20.0% (Applicable on travel insurance, mechanical or electrical appliances insurance and some vehicle insurance.)

There are a number of exemptions from IPT, including:

  • Most long-term insurance
  • Re-insurance
  • Insurance for commercial ships and aircraft
  • Insurance for commercial goods in international transit
  • Premiums for risks located outside the UK – these may be liable to similar taxes imposed by other countries

Unlike VAT, insurance premium tax cannot be recovered and like any tax is subject to change.

Here is a useful page dedicated to Insurance Premium Tax on the UK Government website. Visit gov website on IPT.

Most business insurance providers will quote inclusive of IPT, but be sure to check before accepting a policy to avoid unexpected costs.

Click below to compare Business Insurance quotes.

  •  at

Check out our other latest posts

Do I need business insurance?

  • Business Insurance
  • 3 Min Read
We take a look at different types of business insurance, are whether it's a legal requirement for your business.

Do I need business insurance if I’m self-employed?

  • Business Insurance
  • 2 Min Read
Self-employed business owners are not exempt from needing business insurance, but like limited companies and partnerships the type of insurance required and minimum levels of cover are dependent on a number of factors.

How can I get cheaper Business Insurance?

  • Business Insurance
  • 5 Min Read
The cost of business insurance is dependent on a number of factors, but not all providers will charge the same amount for the same cover. Prices can vary dramatically, but here are a few tips to help get the best

Can I get a business loan with poor business credit?

  • Business Finance
  • 7 Min Read
Searching for business finance can be a minefield at the best of times, but having concerns over previous credit history can make the task seem almost impossible to conquer.

We’re here to discuss your questions, strategies and provide you

Is Business Insurance inclusive of VAT?

  • Business Insurance
  • 2 Min Read
We break down the details of how tax works on business insurance, and what it means for your business.

What is alternative finance?

  • Business Finance
  • 9 Min Read
Alternative finance, also known as alternative funding, is a broad term that describes an array of business finance solutions available outside the typical traditional financial channels, such as regulated banks and credit unions.

Can I pay my business loan off early?

  • Business Finance
  • 2 Min Read
When taking out a business loan, you select the right option for your business’s current situation, but what if your circumstances changes down the line? If you find yourself in the jubilant position of being able to pay your loan
Compare Business Quotes logo
Use of this Site is subject to express terms of use. By using this site, you signify that you agree to be bound by these Terms of Service.
© 2026 CompareBusinessQuotes.com All rights reserved.
Insurance
Finance
Digital Services
Knowledge Hub
Privacy
Terms
CompareBusinessQuotes.com is a business information website and as such it is not authorised and regulated by the financial conduct authority. We do not make recommendations nor do we offer advice about any of the products and service on our website. We are not an insurer, lender, advisor or broker. The information on this website was believed to be correct at the time of publication, however pricing and availability may have changed between publication and now. We accept no responsibility for any errors or omissions. This website is free to use, however we may earn a referral fee for introductions.

Arrange a callback

Arrange a callback with one of our specialists to find deals for your business.