Further rises in Insurance Premium Tax would have devastating repercussions on the UK credit insurance industry, finds a survey of businesses.

Nearly one in five businesses doubted they would renew domestic credit insurance if IPT was raised by as little as 1%.

And the number of businesses who would risk forgoing cover rises to a third if IPT was hiked by 3%.

Gordon Brown, Chancellor of the Exchequer, surprised the industry in the March budget when he kept IPT at 4%, but the industry fears that it is seen as an easy target for additional revenue.

Gerard van der Stelt, group chairman of credit insurer NCM which conducted the survey, said credit insurers would be unable to absorb the cost of further rises.

He added: “The net result will be hundreds of millions of pounds of trade uninsured from the risk of non-payment. Many bankruptcies will follow and thus, of course, consequent job losses.”