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extended warranty and insurance premuim tax
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galwaygreen
 


Member Since: 30 Oct 2011
Location: plymouth
Posts: 6525

United Kingdom 2016 Discovery 4 3.0 TDV6 Graphite LE Auto Loire BlueDiscovery 4
extended warranty and insurance premuim tax

what rate are people paying 12 or 20 percent on this
  
Post #189076215th Dec 2017 10:11 pm
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Scott #55
 


Member Since: 15 Apr 2015
Location: Glasgow
Posts: 1656

United Kingdom 2010 Discovery 4 3.0 TDV6 HSE Auto Nara BronzeDiscovery 4

IPT is 12%. VAT is 20%.
 2014 - D4 2010 HSE Nara Bronze
2012 - FL2 2009 GS Stornoway Grey
2001 - VW Passat Estate Inky Blue
1999 - Ford Mondeo Light Blue
1998 - Rover 25 Red 
 
Post #189077415th Dec 2017 10:33 pm
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galwaygreen
 


Member Since: 30 Oct 2011
Location: plymouth
Posts: 6525

United Kingdom 2016 Discovery 4 3.0 TDV6 Graphite LE Auto Loire BlueDiscovery 4

IPT can also be 20 percent hence the question,,,there are 2 rates
  
Post #189078315th Dec 2017 11:01 pm
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BBDisco3
 


Member Since: 23 Nov 2008
Location: Cheshire
Posts: 3639

United Kingdom 

20% IPT rate applies to travel insurance. Thumbs Up
  
Post #189079115th Dec 2017 11:46 pm
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galwaygreen
 


Member Since: 30 Oct 2011
Location: plymouth
Posts: 6525

United Kingdom 2016 Discovery 4 3.0 TDV6 Graphite LE Auto Loire BlueDiscovery 4

yes agree...also mechanical/electrical appliance insurance and certain VEHICLE INSURANCE...I think mobile phone insurance
  
Post #189079215th Dec 2017 11:50 pm
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BBDisco3
 


Member Since: 23 Nov 2008
Location: Cheshire
Posts: 3639

United Kingdom 

Basically, if the insurance is sold by the supplier of the goods (or connected to the supplier) then the 20% rate would apply.

This generally being a motor trader selling insurance/warranty on a car or a mechanical/electrical breakdown firm who also supply the products.

A car dealer selling GAP do so at the lower rate of 12% as it covers the financial aspect rather than the goods supplied.

Mobile phone companies supply the goods so breakdown/warranty is at the higher rate.

Insurance (other than travel) sold by an insurer or broker is at the lower rate as neither provide the goods which are being insured. Thumbs Up
  
Post #189080116th Dec 2017 12:27 am
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Scott #55
 


Member Since: 15 Apr 2015
Location: Glasgow
Posts: 1656

United Kingdom 2010 Discovery 4 3.0 TDV6 HSE Auto Nara BronzeDiscovery 4

galwaygreen wrote:
IPT can also be 20 percent hence the question,,,there are 2 rates


Thanks - wasn’t aware of that. Thievery.
 2014 - D4 2010 HSE Nara Bronze
2012 - FL2 2009 GS Stornoway Grey
2001 - VW Passat Estate Inky Blue
1999 - Ford Mondeo Light Blue
1998 - Rover 25 Red 
 
Post #189086116th Dec 2017 10:15 am
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galwaygreen
 


Member Since: 30 Oct 2011
Location: plymouth
Posts: 6525

United Kingdom 2016 Discovery 4 3.0 TDV6 Graphite LE Auto Loire BlueDiscovery 4

thanks brian for that clarification.....then theres VAT on toilet rolls,,,......robbers
  
Post #189108316th Dec 2017 9:24 pm
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BBDisco3
 


Member Since: 23 Nov 2008
Location: Cheshire
Posts: 3639

United Kingdom 

The 20% on travel insurance came about due to "VAT avoidance" through "price shifting"

It was a known fact that travel agents would discount a holiday to save the vat element but then load the travel insurance premium by the same amount. This resulted in avoidance of paying the higher rate VAT on the holiday in favour of the lower rate IPT. It didn't benefit the customer as they still paid the same total.

You may remember some travel deals were only given if you took the insurance via the travel agent.

This resulted in IPT on travel insurance being increased in line to the VAT rate.

There was much debate at the time as it was thought the increase in premium may deter some from taking travel insurance. Thumbs Up
  
Post #189149218th Dec 2017 12:04 am
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RichardE
 


Member Since: 24 Apr 2007
Location: Ongar
Posts: 15

United Kingdom 2011 Discovery 4 3.0 SDV6 HSE Auto Buckingham BlueDiscovery 4

Extended Warranty business is further complicated because firms like Motoreasy don't charge IPT because they are not selling an insurance product. They are selling a "discretionary" service plan not regulated by the FCA, so therefore charge VAT at the normal 20%.
I had this confirmed by them a couple of months ago.
 MY12 HSE  
Post #189202019th Dec 2017 3:14 pm
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BBDisco3
 


Member Since: 23 Nov 2008
Location: Cheshire
Posts: 3639

United Kingdom 

So they are not FCA regulated Whistle

You pay your money and take your chance Thumbs Up
  
Post #189203819th Dec 2017 3:59 pm
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James W
 


Member Since: 27 Mar 2008
Location: Wirral, UK
Posts: 3056

United Kingdom 

This has come up before. The FCA will regulate the firm and any relevant licencing but with regards to an individual dispute over payouts, etc. (which I guess is the common thing) they will direct you to the Financial Ombudsman Service to mediate (generally, for 1 to 1 complaints)

FOS were, by their own admission unable to make Warranty Direct do anything after reviewing my case for several months. They were a toothless tiger in my experience.

Being FCA regulated can only be a 'good thing'. I would just be weary about what expectations that raises in your mind.
 D4 XS, gone, much loved, never forgotten
2018 FFRR SDV8 Autobiography - WTF does this button do 
 
Post #189206019th Dec 2017 4:29 pm
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RichardE
 


Member Since: 24 Apr 2007
Location: Ongar
Posts: 15

United Kingdom 2011 Discovery 4 3.0 SDV6 HSE Auto Buckingham BlueDiscovery 4

I didn't want to rake over hot coals!!

The OP asked a question about the rate of IPT on extended warranty. I just pointed out that some extended warranty business doesn't attract IPT at all, but VAT is charged. These are very different taxes, including the fact that VAT is recoverable for VAT registered businesses, as opposed to IPT which is not.

The main deciding factor whether VAT or IPT is charged is whether the product is FCA regulated or not, which is why I mentioned it, not to stir things up!
 MY12 HSE  
Post #189206619th Dec 2017 4:47 pm
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James W
 


Member Since: 27 Mar 2008
Location: Wirral, UK
Posts: 3056

United Kingdom 

Didn't think you were raking anything up. I was just responding to this view:

BBDisco3 wrote:
You pay your money and take your chance Thumbs Up


...as I don't think FCA regulation is the be all and end all that some may think it to be, especially for warranty companies that are notorious for turning down claims. As is the case further up the thread.
 D4 XS, gone, much loved, never forgotten
2018 FFRR SDV8 Autobiography - WTF does this button do 
 
Post #189209119th Dec 2017 5:43 pm
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BBDisco3
 


Member Since: 23 Nov 2008
Location: Cheshire
Posts: 3639

United Kingdom 

You are forgetting the protection under the Financial Services Compensation Scheme which also protects the premiums you have paid to an FCA authorised firm.

Its not just about claims Thumbs Up
  
Post #189209719th Dec 2017 5:57 pm
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