The Association of British Insurers is launching a new video campaign urging Chancellor Philip Hammond to end repeated increases in Insurance Premium Tax (IPT) when he presents his Budget on November 22nd.
The standard rate has increased from 6% to 12% in less than 18 months and independent experts say that costs per-household are set to rise about £200 in 2018. IPT applies to the vast majority of policies sold, whether for motor, property, health or pet cover – for businesses and individuals.
The ABI’s film takes a fairly light-hearted look at the issue, below:
James Dalton, Director of General Insurance Policy at the Association of British Insurers (ABI), said:
“Taxing insurance premiums means punishing people who do the responsible thing. No-one would think it reasonable to fine people for clearing up after their pets, securing their homes or driving carefully. It is no more acceptable to penalise people who sensibly invest in insurance cover for themselves, their families and their belongings. Repeatedly putting up Insurance Premium Tax impacts hardest on the poorest and it’s time for the Chancellor to end this raid on the responsible and commit to no further increases this Parliament.”
Last week, the Social Market Foundation published a new report on the impact of Insurance Premium Tax on UK households, showing it now raises more revenue than many so-called “sin” taxes such as duty on alcohol and tobacco.
Freddy Macnamara, CEO of founder of pay-as-you-go insurer Cuvva, said:
“The price of annual premiums has soared by five times the rate of inflation in the last year. There’s no way that consumers can keep up with this. If the government continues to hike up IPT, we’ll get to the stage where owning and running a car becomes impossible for people on low to medium salaries, especially those living in cities, where premiums are typically higher.
“These rising costs are already causing a change in attitude towards car ownership, with far more drivers opting to borrow cars from friends and family when they need them, rather than owning one outright. Luckily, the insurance market is now in a position to cater to these drivers, with more flexible pay-by-the-hour policies available on the market.”