One of the more striking findings in the Insurance Premium Tax (IPT) report the Social Market Foundation published last week, was the finding that half the country had never even heard of it. I tweeted at the time that this made it the King of the Stealth Taxes, but it also reflects a general lack of awareness among the public about how (and how much) they are taxed. Some of this is understandable – most people have better things to do than studying the intricacies of the tax system - but the fact that 1 in 9 said they had never heard of VAT does invoke a degree of despair.
Still the evidence is clear that the insurance industry needs to do more to raise awareness of IPT with the public. Certainly the Chancellor won’t do it for us. IPT has doubled in two years because it is a reliable revenue raiser with only limited political pain. It’s like taking candy from a baby compared to raising fuel duty or beer duty.
That’s why organisations put so much effort into raising awareness of taxes that impact their sectors. Working at the Treasury for nearly five years, I have been on sharp end of more anti-tax campaigns than most. After the ‘omnishambles’ budget of 2012 I saw at first-hand how Greggs the bakers weren’t just good at making pasties and sausage rolls. Their fightback on the so called ‘pasty tax’ was relentless and irresistible. Much the same can be said for campaigns against alcohol duties, fuel duty and air passenger duty. All shared one common thread – they put their customers first.
The insurance industry has made similar efforts in the last few years, highlighting how IPT is a raid on the responsible and hits people and businesses who do the right thing. But with the Budget looming and increasing pressure on public finances, now sees like a good time to up the ante. So today we are launching #IPTsUnfair, a new video led campaign that highlights the absurdity of taxing people for doing the right thing. I hope it will make people think about this tax a little bit more than they do (as well as make them laugh).
The campaign shows how serious we are as an industry about keeping the costs of insurance down for our customers. If we have to do something like this before every budget, we will. That’s because we think insurance is a social and economic force for good. Making it more expensive for people to reduce their financial risk doesn’t make much sense. To do so without people really knowing about it, that’s just unfair.