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VAT on services used and enjoyed in the UK

The government will apply VAT ‘use and enjoyment’ provisions,

so that from next year it will be clear that all UK repairs made

under UK insurance contracts will be subject to VAT in the UK.

The government is considering a wider review of offshore-based

avoidance in VAT exempt sectors, with a view to introducing

additional use and enjoyment measures for services such as

advertising in the following year.

Insurance premium tax (IPT)

The standard rate of IPT will increase from 6% to 9.5% from

1 November 2015 for insurers using the IPT cash accounting

scheme. For insurers using the special accounting scheme,

premiums relating to policies entered into before 1 November

2015 will continue to be liable to IPT at 6% until 29 February

2016, after which all premiums received by insurers will be taxed

at 9.5%.

Vehicle excise duty (VED)

A new VED banding system will be introduced for cars registered

after 31 March 2017. First year rates will depend on the carbon

dioxide emissions of the vehicle, ranging from £0 for cars with

zero CO


emissions to £2,000 for CO


emissions over 255g/km.

After the first year there will be a flat standard rate of £140 for

all cars except those with zero emissions, which will continue to

pay £0. Cars with a list price above £40,000 will attract

a supplement of £310 a year for the first five years

in which the standard rate is paid.

Company car tax rates

As announced in the March 2015 Budget, the

appropriate percentage of list price subject to

tax will increase by three percentage points

for cars emitting more than 75g/km of CO


to a maximum of 37% in 2019/20. There will

be a three percentage point differential

between the 0–50g/km and 51–75g/km

bands and between the 51–75g/km and

76–94g/km bands.


8 JULY 2015

page 9


Save insurance premium


– renew your cover

and pay by annual

premium before

1 November 2015.