Insurance Premium Tax (IPT) to increase again
24 November 2016
In the Chancellor's UK Autumn Statement 2016, Insurance Premium Tax (IPT) is set to increase from 10% to 12% from 01 June 2017. The increase means IPT has doubled from 6% in less than 18 months.
The British Insurance Brokers Association has slammed the increase as 'outrageous'.
"Over the past 15 months, policyholders have already seen an increase of 66% in the IPT they pay - this further increase to 12% in this regressive tax is outrageous and is a tax on protection which will hit everyone and especially those 'just about managing'. We believe that this increase is contrary to the stated policy of HM Revenue and Customs "that IPT should make the required contribution to HM Government revenue while minimising the effect on the take up of insurance. This increase comes at a time when both motor and home insurance premiums are rising and our fear is that many of those who need it will avoid taking up insurance and be unable to afford the protection they need."
IPT was introduced in 1994 to raise revenue from the insurance sector, which was then viewed as being under taxed. Life assurance, income protection and all other long-term insurances are exempt. Travel insurance policies are charged at 20% IPT, and remains unchanged.
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