§ Mr. RooneyTo ask the Chancellor of the Exchequer in what circumstances the rate of insurance premium tax is 17½ per cent. on travel insurance. [31531]
§ Dawn Primarolo[holding answer 26 February 1998]: Higher rate insurance premium tax of 17.5 per cent. applies to travel insurance where the contract is arranged through or supplied by:
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- (i) a tour operator or travel agent;
- (ii) a person connected to a tour operator or travel agent; or
- (iii) a person who pays any part of the premium, or a commission or fee relating to the insurance contract, to one of the aforementioned.
However, where travel insurance is supplied free of charge to the consumer the premium paid to the insurer by the retailer is only subject to the standard rate of insurance premium tax (4 per cent.), regardless of supplier.