The insurance industry’s pleadings for an easy ride in the Chancellor’s Autumn Statement fell on deaf ears today as the Treasury announced another 2% added to Insurance Premium Tax.
Reactions on social media appeared instantly, with British Insurance Brokers Association executive director Graeme Trudgill tweeting:
Fresh from their recent news that the government will consult on raising the small claims limit and remove the right for monetary compensation, the Association of Personal Injury Lawyers pretty much wrote itself:
With just minutes to compose their thoughts, the Association of British Insurers’ Huw Evans called the IPT rise ‘a hammer blow for the hard pressed’. Maybe Radio 4 More or Less can look into this, but the paltry 2% figure doesn’t sound big enough on its own so most appear to be saying, ‘hang on a minute, 2% is 20% of 10% and that’s loads’.
Here’s what Huw had to say:
“Over the past 15 months, policyholders have already seen an increase of 66% in the Insurance Premium Tax (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”.
Edmund King, AA President said: “We have seen a 100% hike in this tax on motor insurance. This is not a luxury but a legal requirement for drivers. It’s also a tax on homeowners who take the responsibility for protecting their property.
“This is a backward step which could backfire with more uninsured drivers and higher costs that will ultimately be funded by higher premiums.”