Last month the Association of British Insurers (ABI) called the Insurance Premium Tax (IPT) “unfair” and urged the government to end the hikes. Now a lobby group is adding to the pressure on Chancellor Philip Hammond.
With the Budget to be presented on November 22, calls are being amplified – with ABI even launching a video campaign and the TaxPayers’ Alliance highlighting the cost projection for UK households.
A report by
City A.M. cited the think tank as saying that over a period of five years, the cost burden to be carried by the average UK household would be £428. The group wants not only a halt in increases but also a rate reduction.
“It cannot be right to make it more expensive for taxpayers to do the right thing and buy insurance to protect themselves and their businesses,” said TaxPayers’ Alliance chief executive John O’Connell, as quoted by the report. “The government should rule out any future increases and cut it instead.”
The Social Market Foundation, which in October published a report tackling the IPT’s impact, said the “little-known” tax has in fact risen faster than tax on tobacco since 1994. Initially set at 2.5%, the rate has grown to the current 12%.
“Taxing insurance premiums means punishing people who do the responsible thing,” said ABI director of general insurance policy James Dalton. “No-one would think it reasonable to fine people for clearing up after their pets, securing their homes, or driving carefully.”
According to the trade body, the UK now has the sixth highest level of IPT in Europe.
Huw Evans, ABI director general, previously commented: “Having doubled this tax in two years, it is time for the Government to stop raiding the responsible and commit to no further increases in this Parliament.”
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