As of November 1st 2015 the rate will increase from 6% to 9.5%. The new figure will be due on all insurance premiums received on or after this date.
Perhaps some of this extra cash raised by the government will go into improving infrastructure for cycling. More likely not, but unfortunately tax remains as one of the unavoidable certainties in life.
Although it is beyond our control and the funds raised will go directly to the government, we feel compelled to apologise for any increases in the total amount you will be required to pay for your cycle insurance. As our premiums are relatively small, the jump is unlikely to be as noticeable as it will be with other insurance products, but it is still important we draw your attention to it.
Your policy renewal quotation will be sent 3 weeks before it is due. Clients with cover due to renew on November 1st will soon receive invites based on the new tax rate.
Calculating the impact of the tax rise on new or renewing policies
The increase of 3.5% will have a small impact on your new premium.
For example, on a premium of £200 the tax due would have been £12. Under the new legislation, that amount will rise to £19, an increase of £7.
The rate applied to additional premiums
From November 1st if you request a change to your policy that requires an additional premium to be paid, for example if you add another bicycle or some accessories, you will have tax applied to the amount due at the 9.5% rate.
The rate applied to refunds or cancellations
If you are due a refund after making a change or requesting the cancellation of your policy, the tax amount you receive back will be calculated at the rate at which you were charged when your policy cover begun i.e.
- You will be refunded tax at the 6% rate if cover started on October 31st 2015 or before
- IPT will be returned at 9.5% if cover started on November 1st 2015 and after
While we have never designed our policy for ‘rock bottom prices’, we none the less strive to offer the best value we possibly can. Our insurance isn’t a re-branded household insurance, it is bespoke cycle insurance designed in house to provide all the cover you need. We are confident that we supply the best cycle insurance on the market for those racing, training, and travelling with their bicycles, and expect to do so for many years to come.
We also appreciate that there is a lot of detail involved in the change. If you wish to have the information explained further please do not hesitate to contact us.