In today’s summer Budget Chancellor George Osborne made the announcement that, from November, Insurance Premium Tax will increase from 6% to 9.5%. This represents a 58% rise in the tax which is applied to most general insurance premiums.
British Insurance Brokers’ Association CEO, Steve White responded to the announcement saying: “We are extremely disappointed in this rise in Insurance Premium Tax and will mean insurance will become more expensive for the public as a result. Those hit by this stealth tax will include the 20.1 million households with contents insurance; 19.6 million with motor insurance and 17 million with buildings insurance.”
Commenting on the Government’s ongoing efforts in working with the industry to reduce the cost of insurance he remarked that: “It therefore seems counterintuitive to be taking measures which will add to the cost – effectively taxing protection.”
He went on to say: “We hope the Government will review this rise and correct it in further budgets.”
Managing Director of Alan Boswell Insurance Brokers, Chris Gibbs, commented: “Because of the pressure already on insurers to trim costs down to a minimum we believe that in most instances the increase will have to be passed on to the consumer rather than absorbed by the industry.
“However, competition remains fierce and so some insurers are bound to use the opportunity to absorb the costs in the short term to create a marketing edge. For businesses the increase will be more dramatic as the premiums tend to be much higher. “
At Alan Boswell Group we will continue to work on behalf of all of our clients to ensure the best solution to meet their insurance requirements. To find out more about how we operate, visit our About Us page.