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In July, it was announced that a new budget was to be put in place regarding Insurance Premium Tax. Much to the disappointment of many, the change meant a rise in taxation. The increase was implemented on November 1st for everyone except insurers who “operate on a special accounting scheme.” – Gov.uk
Insurance Premium Tax (IPT) was introduced in 1994, and has only been increased three times since it was first introduced. This most recent increase has seen the biggest hike so far, with an rise of 3.5pc.
Since the beginning of November, IPT has been raised from 6pc to 9.5pc. The changes have been justified by the fact that many family premiums have fallen and that, even with the 3.5pc increase, England still pays a lower rate compared with other countries – though this is little comfort for those negatively impacted.
The change has been described as “counter-productive” by Steve White, the BIBA chief executive; due to the fact that the Government has, until now, been working to reduce costs for consumers.
What It Means For You
Although it is predicted that the changes will only affect one-fifth of all premiums, there is a chance that many Britons will decide that the cost of cover is simply too much, and take their chances uninsured – a gamble that could have serious financial ramifications for them.
Whether you are taking out fresh insurance, or are looking to renew your current contract; all policies will include the additional charge relating to the increase. At GSI Insurance Ltd, we hold a broad portfolio of insurers and will work with you to find the most cost-effective insurance that fully meets your needs.