The recent announcement that Insurance Premium Tax (IPT) will be increased by 0.5 percent has been described as another blow for the industry by FUW Insurance Services.
“We are extremely disappointed as this is the second increase in IPT in less than a year and follows last July’s increase from 6 percent to 9.5 percent, with the rate having doubled in the last five years and raising £8 billion in that time,” said FUW Insurance Services Managing Director Mark Roberts.
“We are worried that the Chancellor sees increasing IPT on insurance as an easy target and plans to bring the rate in line with VAT, because unlike VAT, IPT cannot be claimed back by the businesses we insure.
“Any further increases in IPT would be a severe blow to the responsible businesses and households that insure with us and there is a real risk that those already struggling to make ends meet will reduce their cover or stop insuring altogether; Something that could ultimately prove disastrous.”