After being announced as part of Chancellor George Osbornes July budget, this month sees an increase in the Insurance Premium Tax (IPT) to 9.5%.
“Insurance remains a very competitive market and it is very likely that the increase in Insurance Premium Tax may lead to greater competition in the market” says John Noone Managing Director of H&H Insurance Brokers.
The tax which was first introduced in October 1994 at a rate of 2.5% has subsequently been increased to 4% in 1997, it then saw a further increase to 5% in 1999 and then to 6% in 2011. With the new rate of 9.5% still amongst one of the lowest in Europe, there is every chance we could see further increases in years to come.
This very significant increase in IPT will affect general insurance policies including motor, household and business insurance and is set to generate up to £1.75bn for the Treasury.
John Noone, explains what this will mean to consumers: “Whilst the new Insurance Premium Tax rate will push up the cost of insurance, it is really important that consumers and businesses resist the obvious temptation to counteract the increase by reducing their insurance protection. The key has been and always will be to ensure that you have the right cover in place. It is crucial that the cost of the insurance premium isn’t the only consideration when taking out insurance. It’s about getting the right cover that you need, as getting this wrong could be much more costly.”
Established in 1987, H&H Insurance Brokers is in its 28th year of trading and employing over 30 members of staff across the north of England, Wales and Scotland they are today one of the foremost independent brokers in the country. Increasingly, companies need to ensure that they are adequately insured both from a business protection and legislative perspective; H&H Insurance offers a broad portfolio of policies across a range of specialisms, with clients ranging in size from small start-ups to large businesses.
To check you do have the right insurance cover in place contact us today