Mark's motor insurance policy indicates a premium of £100 and an additional charge for Insurance Premium Tax (IPT). What is the amount of IPT charged?

In the UK, Insurance Premium Tax (IPT) is typically charged at a rate of 12% for standard insurance policies, including motor insurance. To calculate the IPT on Mark's premium of £100, one simply takes 12% of the premium amount.

Calculating this gives:

IPT = 12% of £100 = 0.12 * £100 = £12.

Therefore, the amount of IPT charged on Mark's motor insurance policy is indeed £12, making this the correct answer. Understanding how IPT is calculated and the applicable rates helps in assessing one’s potential costs when acquiring insurance, which is crucial for budgeting appropriately.