Responding to the announcement in the Autumn Statement of another increase in Insurance Premium Tax (IPT), from 10% to 12%, Director General of the Association of British Insurers Huw Evans said:
“Yet another increase in Insurance Premium Tax is a hammer blow for the hard pressed. It will hit consumers and businesses alike, hurting those who buy business, motor, property, pet and health insurance. It marks a doubling of Insurance Premium Tax since last year and to claim a consultation on whiplash reforms which hasn’t even gone before Parliament yet will offset this just won’t cut it.”
Here’s the additional cost of the three recent IPT increases.
The increase in IPT announced today is the third rise since the Summer Budget in 2015.
- The former Chancellor George Osborne announced an increase from 6% to 9.5% in the Summer Budget in July 2015 which came into effect in November of the same year.
- The rate was increased again to 10% in this year’s March Budget, coming into effect on October 1st.
- The third increase today, to 12%, means the tax has doubled in less than 18 months.
IPT affects more than 50 million policies and applies to policies purchased by businesses, charities and individuals. Taken together, the three increases will raise over £13 billion for the Government over five years.