For the insurance industry the Budget was something of a non-event, with no change announced in Insurance Premium Tax. On the upside, there was no rise, but on the downside this remains an undeniable punishment on consumers who decide to protect their lives, healthcare costs, plus personal possessions, by taking out insurance – when there is often no legal requirement to do so.
Here’s the response from BIBA:
British Insurance Brokers’ Association (BIBA) CEO, Steve White, said:
“We welcome Philip Hammond’s decision not to change the current rate already at a significant 12 pence in the pound of every premium paid. However in a way this amounts to a pyrrhic victory and we will not stop campaigning for Government to freeze, if not reduce, this rate of tax on insurance for the remainder of this parliament. We continue to highlight to the highest level of Government the dire consequences of a tax that potentially reduces access to insurance.”
In its 2018 Manifesto – Engaging, launched in the House of Commons, the British Insurance Brokers’ Association (BIBA) highlighted the unfairness of IPT calling it a tax on protection and has campaigned for it to be frozen in its lobbying, media work and social media campaigns.
Meanwhile the ABI commented:
Commenting on today’s Budget, Huw Evans, Director General, Association of British Insurers, said:
On no further increase in the rate of Insurance Premium Tax
“We are pleased that the Chancellor has done the right thing by not increasing Insurance Premium Tax. IPT already brings in more than £6 billion a year for Government and it would have sent out completely the wrong message to increase costs any further for people who do the right thing by buying cover to protect themselves, their properties and their families.”
On no change in pensions tax relief:
“Many savers will breathe a sigh of relief that the Chancellor has resisted temptation and not raided pensions tax relief. After 6 separate cuts to these tax reliefs since 2010, savers need a period of pensions stability, especially after the tumultuous pension changes in recent years.”
WHEN WILL TELEMATICS DRIVERS SEE THEIR IPT REWARD?
Pete Williams from the RAC makes a very timely point about Chancellor Hammond NOT rewarding telematics drivers with a reduction in IPT on their car insurance. When you think of the savings the government can enjoy from drivers taking more care, being assisted by on-board driving `coaches’ and the savings in tracing stolen vehicles by the use of trackers and black boxes, it really is an indicator of the contempt the UK government has for drivers who go the extra mile to protect their cars, and drive courteously.
RAC head of external affairs Pete Williams:
“We welcome the Chancellor’s decision not to increase Insurance Premium Tax. After three rises in the last three years, motorists can breathe a sigh of relief that they will not face a further tax hike on their car insurance costs.
However, we would have liked to have seen recognition from the Chancellor about the role that telematics-based insurance policies can play in terms of safer driving, particularly among younger drivers. A cut in the rate of IPT for such policies would have encouraged the take-up and affordability of telematics policies and the proven benefits these offer of safer driving behaviours among young and new drivers – a missed opportunity from the Treasury.”