Another blow from the Summer Budget 2015 is the increase in the standard rate of Insurance Premium Tax from 6% to 9.5%. This change will effect most standard insurance policies, including business insurance, but with the notable exception of Travel Insurance which is already subject to a higher rate IPT of 20%.
The changes are proposed to go in place as of 1st November 2015, pending royal ascent, effecting policies incepting on or after this date.
George Osborne has provided an unsatisfactory rationale behind the change, justifying the increase on comparison with other countries’ IPT and the premiums for most families having fallen over recent years. It appears that IPT must increase so the Treasury can take advantage of the savings, instead of families and businesses.
Other amendments put forward in the Budget, in relation to insurance include:
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