Industry urges IPT U-turn
Seventeen business leaders have written an open letter to the government calling for plans to raise Insurance Premium Tax (IPT) in June to be scrapped.
The letter also urges the government to commit to an IPT freeze for the remainder of this parliament.
If the June increase goes ahead, IPT will have doubled from six per cent to 12% since November 2015, raising an estimated £13bn for the government in five years.
The letter reads, ‘Insurance is a basic financial safety net for tens of millions of people and businesses across the UK. The government’s decision to double the standard rate of insurance premium tax (IPT) from six per cent to 12% in less than two years has driven up the cost of over 50 million insurance policies. IPT is a stealth tax that hits households, charities and businesses who do the right thing and these increases have cost some families hundreds of pounds a year already.
‘IPT is a tax on productivity too. Unlike VAT, which most businesses can claim back, it hits insurance-dependent industries like manufacturing, construction and exporters the hardest. The Institute of Fiscal Studies recently said that problems with IPT were now ‘more severe’ as the rate has become ‘too high’.
‘It is time to end this raid on the responsible by cancelling the planned June IPT increase and freeze it for the remainder of this parliament.’
The letter is signed by Huw Evans, director general, Association of British Insurers; Inga Beale, chief executive, Lloyds of London; Edmund King, president, The Automobile Association; Steve White, chief executive, British Insurance Brokers’ Association; Mike Cherry, national chairman, Federation of Small Businesses; Caron Bradshaw, chief executive, Charity Finance Group; John Hemming, chairman, Charity Tax Group; Miles Celic, chief executive, TheCityUK; Brian Berry, chief executive, Federation of Master Builders; Laurence Besemer, chief executive, Forum of Insurance Lawyers (FOIL); Iain Elliot, chairman, Forum of Scottish Claims Managers; Dave Matcham, chief executive, International Underwriting Association; Christopher Croft, chief executive, London and International Insurance Brokers’ Association; Charles Manchester, chairman, Managing General Agents Association; Richard Burnett, chief executive, Road Haulage Association; Martin Sime, chief executive, Scottish Council of Voluntary Organisations; and Ruth Marks, chief executive, Wales Council for Voluntary Action.