BIBA calls for IPT review

Tax receipts for 2023/24 are expected to be £8.1bn, according to the HMRC. This is up eight per cent on the previous year, which was an increase of 11% on the year before that.

In response to this announcement, BIBA has urged the government to make a number of changes to Insurance Premium Tax (IPT).

It is calling on a cut to the headline rate from 12% to 10%, while offering exemptions to cyber insurance and multi-occupancy residential buildings that require or are undergoing remediation.

BIBA has also urged the government to bring the rate of IPT on travel insurance, which is 20%, in line with other classes of insurance.

It said, “IPT is a regressive tax that hits the poorest hardest and acts as a barrier to the take-up of adequate insurance at a time when people are increasingly vulnerable because of the cost of living and businesses struggle to manage costs because of inflation.

“BIBA understands that governments need more revenue, but the insurance sector is providing records amounts as premiums rise due to inflationary pressures. In the meantime, businesses are cutting or reducing vital finance protections due to cost-of-living pressures. This reduces consumers’ and businesses’ resilience, exposing the wider economy to greater potential shocks and reduces the level of economic growth we can achieve.”


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