Pressure mounts on Hammond over looming IPT hike

Pressure is mounting on Chancellor Philip Hammond to avoid another rise in Insurance Premium Tax (IPT).

The Taxpayers’ Alliance has become the latest organisation to urge the government not to slap yet another costly stealth tax on consumers.

Taxpayers’ Alliance chief executive John O’Connell said an increase “will benefit the Treasury’s bean-counters but will hurt responsible consumers”.

“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. The government should rule out any future increases and cut it instead,” he said.

The ABI has been a vocal critic of any plans to raise the tax yet again. A study it commissioned showed IPT raised more money than beer and wine.

Chief executive Huw Evans said the report shows how ‘unfair’ it is on individuals who have rightly taken out insurance.

There has been widespread speculation that the government intends to raise IPT to the same level as VAT. 

IPT has doubled to 12 per cent since 2005. The latest talk is that the government could boost it to 20% and roll it into VAT by the end of the decade.