Spring Budget ‘missed opportunity’ by not including action on IPT – Trudgill

Biba chief executive Graeme Trudgill has said the government “missed an opportunity” by not including action on insurance premium tax (IPT) in its Spring Budget.

The document was outlined by Chancellor Jeremy Hunt yesterday (6 March 2023) and was declared as the “budget for long-term growth” in the UK.

However, broker body Biba said there was a “missed opportunity to recognise the vulnerabilities inherent within our economy”.

And it felt that cutting to the overall rate of Insurance Premium Tax (IPT) should have been included in the budget to “further improve economic security”.

IPT is a tax on the price of an insurance product and functions as an indirect tax on consumers and businesses that is collected by insurers and paid to HMRC.

Its current rate sits at 12%, but Biba has been calling for the government to cut this figure to 10% and exempt strategic lines.

The broker body also felt that greater flood defence investment to account for impacts of inflation should have been included in the budget, as well as a VAT exemption for flood resilience building materials.

“We recognise the missed opportunity when it comes to taking more decisive action on issues such as IPT and increased flood investment in response to inflationary pressures,” Trudgill said.

“Managing risk and ensuring economic security by closing protection gaps and building business resilience are and should be the priority of all political parties.

“Therefore, Biba will continue to champion these and wider issues on behalf of our members as we move further into this election this year.”

Positives

However, Biba said the budget also included some welcome interventions, such as an additional 2p reduction to the main rates of employee and self-employed national insurance contributions from 6 April 2024.

Hunt also said that inflation was forecast to fall below the 2% target by the next quarter and that more would be done to support small and medium sized enterprises (SMEs).

This includes providing £200m of funding to extend the Recovery Loan Scheme as it transitions to the Growth Guarantee Scheme.

Biba said that “this all fits nicely with our core manifesto theme of economic security”.

The document, which was launched in January 2024, focuses on highlighting the value that insurance brokers bring to the UK economy, while also suggesting actions that could better support UK brokers in providing this value.

“With the cost of living continuing to bite, we welcome the positive measures to ease the burden on businesses and working people announced in the budget,” Trudgill added.