HMRC clarifies IPT decision

The decision, announced this week, comes after a tribunal decision involving seven major UK surety bond underwriters, supported by the Association of British Insurers. These underwriters had appealed a Customs decision in 2003 that reinsurance of surety bonds was primary insurance and therefore liable to IPT. As a result, businesses writing this type of reinsurance were forced to register and account for IPT on premiums falling after 1 April 2004. However, the tribunal has ruled that insurance of surety bonds is a specialist sector of the reinsurance market, with no case law or textbook...