Government raked in more tax from IPT in December than the so-called ‘sin’ products such as beer, spirits and gambling
The ABI is once again calling on the government to cut Insurance Premium Tax on the budget on 11 March.
It highlighted that the government received after half a billion pounds in IPT for December alone, which was up 10% against the same figure for the previous year.
ABI pointed out that this was in fact higher than tax received from duties levied in so-called ’sin’ products such as beer and spirits, and gambling.
The insurance industry body said the standard rate of IPT had doubled since 2015, rising from 10% to 12% in June 2017 most recently. The tax is levied on most policies sold, including property, motor, health (including cash plans), pet and business insurance, ABI said.
ABI director general Huw Evans said: “Hard working and responsible families and businesses deserve a break from the IPT burden which pushes up the cost of insurance without people noticing.
”This tax hits the poorest the hardest on products that most people need like motor or home insurance. It also penalises people for doing the right thing and saving the state money, while taxes on alcohol and gambling have stayed low.
“The Treasury’s rate of IPT is the sixth highest in Europe and hits our international competitiveness at a time when the UK needs to be making itself more globally attractive.”
In its 2020 manifesto, broker trade body Biba called on the government to freeze the insurance premium tax (IPT) rate at 12% for the duration of the Parliamentary term, labelling the tax as an “unfair burden” on both businesses and consumers.
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