On 8th July 2015, George Osborne, Chancellor of the Exchequer, delivered his Summer Budget 2015 to Parliament, the first budget since the General Election. With a Conservative majority, Osborne has the opportunity to enact policies that he believes \u2018puts security first\u2019 and provides a \u2018Budget for working people\u2019.<\/p>\n
One of the most controversial and unexpected measures of the Budget was Osborne\u2019s increase to the Insurance Premium Tax (IPT). Considered a necessity by the government but a surprise \u2018stealth\u2019 tax by industry insiders, the IPT increase has been met with consternation and confusion.<\/p>\n
Understanding the Tax Hike<\/strong><\/p>\n The standard IPT will be increased by 3.5 per cent\u2014raising it to 9.5 per cent\u2014and will apply to\u00a0some<\/strong>\u00a0insurance premiums starting on 1st November 2015 and\u00a0all<\/strong>\u00a0qualifying premiums on 1st March 2016. The government estimates the hike will generate an extra \u00a31.75 billion per year.<\/p>\n This annual revenue boost will come from all households and businesses that pay the IPT on insurance policies. However, there are several types of policies that are exempt from IPT, including the following:<\/p>\n Despite the 56 per cent rise in costs, the government is confident that there will only be negligible impacts to both the public and private sectors. These impacts include one-off costs for insurers to update their systems to include the new tax rate as well as an annual increase of about \u00a335 for the average two-car family. One of the most potentially severe outcomes involves private medical premiums, which could increase by between 7.5 and 15.5 per cent. This may cause some families and businesses to forego private medical cover, placing increased pressure on the already burdened NHS. Other implications may prove that the drawbacks of the IPT hike outweigh its benefits.<\/p>\n However, Osborne is confident that the IPT hike will benefit the UK economy, arguing that it brings the UK\u2019s IPT in line with other countries. At 9.5 per cent, the United Kingdom has one of the lowest IPT rates in Europe\u2014much lower than Germany\u2019s 19 per cent IPT and Italy\u2019s 21.5 per cent IPT. With competitive rates and a robust, diversified insurance industry, the government hopes to continue attracting new international business due to its relatively low IPT.<\/p>\n What Happens Now?<\/strong><\/p>\n amb Insurance Services ltd is committed to providing you with the most effective cover for your needs. We will work to ensure that the IPT increase has the smallest possible impact on your policy.<\/p>\n","protected":false},"excerpt":{"rendered":" On 8th July 2015, George Osborne, Chancellor of the Exchequer, delivered his Summer Budget 2015 to Parliament, one of the most controversial and unexpected measures of the Budget was Osborne\u2019s increase to the Insurance Premium Tax (IPT).<\/p>\n","protected":false},"author":1,"featured_media":23471,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[37,36],"tags":[],"class_list":["post-23470","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial","category-personal"],"yoast_head":"\n\n