Opinion: IPT is A Tax on Doing The Right Thing, It Has to Be Scrapped

IE COMMENT;

It’s very telling that no mainstream political party is promising to do anything about Insurance Premium Tax. If anyone suggested that buying a battery car or bicycle should attract an extra tax there would outrage from the green lobby, because this would be seen as punishing those “doing the right thing.”

But IPT does exactly that. It hammers those who take out travel insurance, it increases costs for drivers, especially younger drivers, who are complying with the law. The longer it goes on, the more people will simply lie about their true circumstances, or not bother with insurance at all. The industry needs to campaign between now and July 4th to state the case for fairness, for a level playing field on insurance, which has become almost as expensive as a monthly car lease payment for many people.

The tipping point will be reached one day soon, so it’s important to warn politicians of the serious consequences of insurers withdrawing from the market entirely, or a significant percentage of drivers essentially carrying no cover.

Here’s some comment from Broadstone;

Cara Spinks, Head of Insurance Consulting at leading independent consultancy Broadstone, said: “Demand for private healthcare insurance products, like PMI and health cash plans, has soared following the increase in NHS waiting lists over the last three years, with many people waiting over 18 weeks for treatment.

“Cost remains a significant issue, with healthcare costs continuing to drive up premiums across the insurance market. It means that IPT is a lucrative source of tax revenue for the Treasury, with the rate of IPT more than doubling from 5% in 2011 to its current rate of 12%.

“The private market has an important role to play in alleviating pressures on the NHS as well as the wider economy given the surge in economic inactivity due to chronic sickness the nation has experienced.

“We would like to see the next government move in the opposite direction and consider reducing or removing IPT on health insurance products such as PMI and health cash plans. This would help make these products more affordable meaning more employees would get access to the healthcare they need to be productive at work, reduce absenteeism and increase productivity, all the while reducing the pressures on public health services.”