Broker body calls for Chancellor Hammond to cut IPT to relieve pressure on premiums
Chancellor of the Exchequer Philip Hammond should cut Insurance Premium Tax in today’s Budget, according to Biba.
In a submission to the chancellor ahead of today’s Budget speech, the broker industry body said the10% increase in uninsured accidents identified by the Motor Insurance Bureau (MIB) in August can be attributed to increases in IPT.
IPT has doubled to 12% over a 20 month period.
Biba also pointed to the impact on people living or operating in flood risk areas, where premiums are already necessarily higher if the risks are outside the scope of Flood Re.
Biba chief executive Steve White said: IPT is a tax on protection and the UK has one of the highest levels of premium tax in Europe yet our insurance sector also has one of the biggest costs of regulation.
“Any further increase would exacerbate the problems already being seen.”
Biba executive director Graeme Trudgill added: “We have seen a 100% increase in tax and this is without doubt beginning to bite at a time when motor premiums in particular are rising as a result of continued fraud and the March change to the personal injury compensation discount rate.
“Figures from both the AA and Biba’s own research show a significant increase in quarter three premiums for motor insurance. The Biba-Acturis premium index revealed an 8% hike in private motor premiums before IPT is applied - rising to 10% when the last tax increase is applied.”