As of the beginning of November 2015 Insurance Premium Tax has been increased by the government from 6% to 9.5%. The Chancellor announced the rise in the summer Budget which impacts all insurance customers. Whilst the insurance industry do not welcome the rise, it is important to understand that this is the first significant hike in the standard rate of the tax since 1996.Whether you have a personal or business insurance policy, unfortunately the increase will affect you and be applied to all renewal and new business policies.
The Chancellor claims the increase will only affect one-fifth of all premiums, but the British Insurance Brokers Association criticised the move calling it a “stealth tax” on insurance policies that would in fact hit millions.
The association went on to suggest the move was a hypocritical one as the Government had been working with the industry to reduce the cost of insurance for customers, which included a summit chaired by the Prime Minister. Its chief executive Steve White said “it seems counterintuitive to be taking measures that will add to the cost – effectively taxing protection”.
The tax increase has alerted concerns that customers will decide insurance is too expensive and reduce their cover, or decide to have no cover at all. Although this may seem to prove cost effective in the short term, it could put your business at risk and expose you to a major shortfall if you face a claim – let alone breaking the law.
HETAS Insurance Services is a trading name of Jelf Insurance Brokers Ltd and HETAS Ltd is an introducer appointed representative of Jelf Insurance Brokers Limited. Jelf and Jelf Clarke Roxburgh are trading names of Jelf Insurance Brokers Ltd. Jelf Insurance Brokers Ltd (Reg No. 0837227) is part of Jelf Group PLC (Reg No: 2975376) and is registered in England and Wales at Hillside Court, Bowling Hill, Chipping Sodbury, BS37 5JX and is authorised and regulated by the Financial Conduct Authority (FCA). Not all products and services are regulated by the FCA. www.fca.org.uk