The Association of British Insurers (ABI) has requested the Government of UK to freeze insurance coverage premium tax (IPT) in the Budget, to be presented on 29 October.
Terming the tax as “mother of all stealth taxes”, the trade body said that the Brits are paying record tax and it should be kept at 12% in the Budget.
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Insurance premium tax freeze
IPT is charged on general insurance premiums, which include private medical and business, and is borne by the policyholders.
The trade body analysed HM Revenue & Customs (HMRC) data and said that IPT raised £1.35bn for HMRC in August, which is highest ever and £200m more than it raised in August last year.
Additionally, the ABI estimated that the federal government has collected £6.13bn from the tax over the last one year, which is higher than fetched by any of the sin taxes on beer, wine or playing.
ABI director general Huw Evans said: “Despite insurance customers paying more and more of it, many people still remain unaware of it.
“Insurance customers are responsible people, abiding by the law and taking sensible steps to protect themselves, yet this responsible behaviour has been punished by repeated rises in IPT.
“The Chancellor should look elsewhere in his efforts to balance the books.”
According to the trade body, the standard rate of IPT has been increased three times since 2015. Last time in June 2017, it was increased from 10% to 12%. The IPT is imposed on most of the policies sold, including property, motor, health, pet and business insurance.
ABI re-launched its #IPTsUnfair campaign earlier this month, which has been viewed by approximately two million people and has boosted the insurance premium tax freeze movement.
