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UK NEWS

IPT up to 12% in June

Jan 24, 2017
In his autumn statement, Chancellor of the Exchequer Philip Hammond increased the standard rate of Insurance Premium Tax (IPT) from 10% to 12%.

The new rate will apply from 1 June, 2017 and will affect all moving companies in the UK that offer insurance products to their customers. The rate has now doubled in six years.  

“This is clearly something the chancellors rediscovered in 2010 and feel it’s a soft target,” said Rob Thacker, Director, Pound Gates.  “I was always surprised it didn’t increase faster from the time it was first introduced given our mainland European partners have much higher rates. I had assumed insurance lobbying had a role to play in keeping it away from chancellors’ attention whilst other insurer issues like flood defences, etc. warranted greater focus and industry support. Clearly that is no longer the case.  It is a non-recoverable tax, unlike VAT, so I do suspect they will be cautious about rates above 12% otherwise there will be business lobbying for it to become recoverable.”  

Malcolm Pearson, Business Development Executive from Reason Global said that the further increase was disappointing.  “We have now seen IPT double from 6% in 2014 to 12% as of June 1, 2017,” he said.  “Whilst the increases have been explained as being required to update flood defences and fund government infrastructure plans, we sincerely hope that this is the last rise we see for a while. It hits people doing the right thing by buying insurances to protect their business and staff and increases costs in an already tough commercial environment.”  

Rob Thacker added, “From the removers’ perspective, it’s another admin change and expense to pass on to customers in an already competitive marketplace, however it applies to us all, business and personal insurance alike, no doubt it supports the inflation targets for the Bank of England.



NB: In the printed copy of The Mover January 2017, page 10, 'Note from Basil Fry', the lower rate of IPT referred to at the end of paragraph one should be 10% not 9.5%.
 
www.basilfry.co.uk

Photo: Chancellor Philip Hammond delivers the Autumn Statement.

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