Insurance Premium Tax (IPT) will rise from 10% to 12%, effective from June 2017, the Chancellor revealed just moments ago in his Autumn Statement.
Speaking in Parliament this afternoon, Chancellor Philip Hammond said that IPT in the UK is “lower than in many other European countries,” and is currently half the rate of VAT.
“In order to raise revenue, which is required to fund spending commitments I am making today, it will rise from 10% currently, to 12% from next June,” he said.
But whiplash reforms – which will crackdown on compensation claims for whiplash, the main driver of insurance fraud – will deliver a saving of £40 on average for drivers’ premiums, Hammond said.
A fuel duty rise will be frozen for the seventh year in succession, saving the average car driver £130 a year and the average motorist £350.
GDP growth is set to slow in 2017 to 1.4%, compared to a previous prediction of 2.2% from the Office for Budget Responsibility, the Chancellor revealed.
Growth is then set to recover slightly at 1.7% in 2018, 2.1% in 2019 and 2020, and 2% in 2021, he added.
And employers will be coughing up a little more, as the national living wage (NLW) is set to increase to £7.50 an hour next April.
That equates to more than £500 more every year, the Chancellor added.
Hammond also revealed that this Autumn Statement – his first – will in fact be the last. He abolished future Autumn Statements, instead moving the annual budget to autumn, instead of spring, from 2017.
The upcoming Spring Budget will be the last, he said.
