DMBM540340 | Debt and return pursuit: Insurance Premium Tax: Who is liable to pay the debt? The taxable intermediary

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The requirement for certain intermediaries (such as travel agents selling holiday insurance, or shops selling extended warranties on electrical goods), to register for IPT,is both a deterrent and an anti-avoidance measure.

As such, based on current practices, it is not likely to result in a significant number of intermediaries having to register for IPT.

However, if they register they are the taxable person and are liable to render returns and pay tax due. Section 52A (3) of the finance Act 1994, provides:

Tax charged by virtue of subsection (2) above shall be payable by the taxable intermediary as if he were the insurer under the contract mentioned in paragraph (a) of that subsection.

Taxable intermediaries doing business in the UK and having no establishment in the UK must appoint a tax representative (s.57 of the Finance Act 1994) (DMBM540345).