ABI criticises IPT rise, calls it “raid on the responsible”
The Association of British Insurers (ABI) called the latest increase in the government’s Insurance Premium Tax (IPT) to 12 percent coming into effect on June 1 a continuation of the ‘raid on the responsible’.
The latest hike in Insurance Premium Tax (IPT) could add an extra £47 to the average annual household bill, the ABI said in a statement.
The rise will be felt the hardest by those paying higher premiums, including young drivers and those with private medical insurance, according to the association.
With IPT having doubled in under two years, ABI called for a freeze on this ‘raid on the responsible’.
Overall, the rate of IPT at 12 percent could now be adding an extra £283 a year to a typical household’s annual insurance bill as the rate has now doubled since November 2015.
This latest hike will mean that the Government will rake in £5.8 billion a year from IPT.
The rise comes at the worst possible time, with average premiums rising due changes to how personal injury compensation is calculated, rising repair bills, and a resurgence in whiplash-style claims, the ABI said.
James Dalton, director of general insurance policy at the ABI, said: “With a doubling of IPT in just under two years it is time to call a halt to this raid on the responsible. This tax penalises hard working families, as well as businesses, who have done the right thing by taking out insurance to protect against many of life’s uncertainties. This latest hike must be the last. The next government must freeze this tax, to give hard working households and businesses a break.”
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