New 12% tax rate
It has been drawn to our attention that some of our stock renewal invitation letters refer to the new rate as being 10% for policies falling due for renewal on 1 June 2017, while giving the correct figures for the amount of the tax and the total.
We ask those affected to accept our apologies for this slip. The new rate is indeed - regrettably - 12%, and the total payable is as shown in the stock letter.
On a separate point, we are sometimes asked whether it is possible to escape the increased rate by paying the premium before the renewal date. Alas, the tax man is not so easily defeated. The answer lies in section 67A(2) of the Finance Act 1994, invoked by section 17(2) of the Finance Act 2017: for tax purposes, the premium is treated as being received on or after the date of the increase. The result is as expected; but official announcements sometimes seem to imply, quite wrongly, that early payments will escape the increased tax rate.