INSURANCE PREMIUM TAX RISE
The latest revenue raiser from The Chancellor announced in last year’s Autumn Statement is an increase in Insurance Premium Tax (IPT) which is set to increase by 2% to 12% on 1st June 2017.
IPT is a tax that consumers have to pay when they buy insurance. This is the third increase in less than two years and since there is already a higher rate of 20% being applied to travel and other insurances it seems likely that these will also increase to the same level.
The concern is that as these rises increase, particularly on home and motor insurance, consumers will be deterred from purchasing insurance which will not only increase their personal risk but also increase the amount of illegal drivers on the road.
The IPT increase will affect anyone who is taking out an insurance policy on or after 1st June 2017. So if you take out a new policy or renew before that date then the current 10% rate will still apply for the first year of your cover. However, if you already have an active policy the price will remain the same until your annual renewal on or after 1st June 2017.