Following the Autumn Statement 2016 the chancellor of the Exchequer Mr Phillip Hammond stated that Insurance Premium Tax (IPT) will increase to 12% from the 1st June 2017.
The new standard rate of 12% will be due on all premiums received on or after 1 June 2017 which relate to risks for which the period of cover under the terms of an insurance contract begins on or after that date.
With Insurance Premium Tax currently set at 10%, this is now the third time there has been increased in the last two years and the obvious comparison is that IPT is slowly being aligned to VAT – currently set at 20%.
All insurers who provide non-exempt insurance cover for UK risks and the brokers and agents who act for them. Purchasers of insurance which is not exempt from Insurance Premium Tax (IPT) whose insurers choose to pass on the IPT rate rise to their customers.
“as with petrol prices, increases are just accepted and absorbed by the consumer with little or no protest even though everyone ends up out of pocket”
The increase in IPT will generate over 600 million pounds of additional income into the Exchequer and when you then add in increases in liability premiums, driven following the Ogden review, it looks as if everyone will be affected going forward.
Avoiding increases in your insurance premiums may be possible if you shop around and don’t just accept that your premiums are going up. This is where having a good Insurance Broker working for you can be invaluable.
Article supplied by Wrightsure, Stockport.