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Pressure mounts on Hammond to freeze insurance “tax on responsibility”

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By admin , in Money , at November 15, 2017

Chancellor Philip Hammond is facing fresh calls to rule out a further rise in insurance premium tax (IPT) in next week's Autumn budget.

IPT has risen from six per cent in October 2015 to the most recent two-point step up to 12 per cent in June this year.

The doubling of the standard rate will net the government £11.6bn over the course of the parliament. But it will cost the average UK household £428 over five years, the Taxpayers Alliance said.

And after hinting one year ago that IPT could ultimately end up on a par with VAT at 20 per cent, fears have grown that a further hike is on the cards.

Taxpayer Alliance chief executive John O'Connell said such an increase "will benefit the Treasury's bean-counters but will hurt responsible consumers".

He said:

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.

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The calls follow reports earlier this month, which said Hammond has readying another IPT step up on his bid for IPT parity with VAT.

However, Whitehall sources yesterday suggested such an increase was in fact not being considered by the chancellor.

Last week, the Association of British Insurers (ABI) launched a campaign urging Hammond not to "punish" the British public by rising IPT.

ABI director of general insurance policy James Dalton said: "It is no more acceptable to penalise people who sensibly invest in insurance cover for themselves, their families and their belongings."

The Treasury declined to comment.

Read more: Oi Phil! Don't hike premium tax again, say insurers

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