# Insurance Premium Tax to Rise to 9.5%



## Shiny (Apr 23, 2007)

Following the summer budget, Insurance Premium Tax (IPT) is set to rise from the current 6% to 9.5%.

The British Insurance Brokers' Association (BIBA) commented they are "extremely disappointed" in the decision.

BIBA's executive director Graeme Trudgill tweeted: "IPT up to 9.5% from November makes a mockery of the insurance growth action plan and efforts to reduce cost of motor insurance." and the association has described the rise as a "stealth tax".

So expect to see a 3.5% rise in your motor, home & business insurance premiums.

To put this into persepctive, the premium income for the Coversure Group is circa £85m and we represent a very very small part of the insurance industry, so that is an extra £3m in the Government's pot from Coversure's customer's alone!

Direct Line Group's premium income is something like £4bn!


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## empsburna (Apr 5, 2006)

I was reading an article in Post Magazine this morning, someone has said it would represent an increase of up to £17.50 per premium. 

I don't think it will be long before it is at the same rate as VAT.


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## Alfieharley1 (Jun 8, 2014)

I work for British Gas Home Services Homcare. I think we are going to get hit hard by customers leaving or taking the hit also.


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## Shiny (Apr 23, 2007)

empsburna said:


> I was reading an article in Post Magazine this morning, someone has said it would represent an increase of up to £17.50 per premium.
> 
> I don't think it will be long before it is at the same rate as VAT.


If your car insurance is £500 a year, then yes, there will be an extra £17.50 taken by the government.

It makes our job difficult, I can remember when it was first introduced and the subsequent rises, as customers thought it was down us charging more or the old "insurers ripping us off" when it was a charge made by the government.

It has been estimated that a typical corporate business will face increases of £10k in the their insurance premiums.

IPT on Travel Insurance is already the same as VAT at 20%. AlfieHarley1, i'm not sure if it will affect the Homecare services, aren't these charged at 20% ipt anyway?


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## empsburna (Apr 5, 2006)

Shiny said:


> If your car insurance is £500 a year, then yes, there will be an extra £17.50 taken by the government.
> 
> It makes our job difficult, I can remember when it was first introduced and the subsequent rises, as customers thought it was down us charging more or the old "insurers ripping us off" when it was a charge made by the government.
> 
> ...


How many times has it increased? Will this be the third?


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## Shiny (Apr 23, 2007)

Was originally 2.5%, went to 4%, then 5%, currently 6%, soon to be 9.5%. Don't ask me how i recall these things when i can't remember what i had for breakfast this morning!


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## empsburna (Apr 5, 2006)

Funny how things stick with you!

What is stopping the policy monies being collected outside of the UK? Would that sill be liable?


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## Shiny (Apr 23, 2007)

If it is for a UK insurance premium, then it will be added on by the insurer regardless.

There may be some complicated way round things via a loophole, but in fairness it is of no real benefit to the insurer to try and dodge it, all they are doing is collecting it and passing it on. In a regulated industry, i can't see it will be worth them taking the risk of a massive backdated ipt bill that they haven't collected from their customers.


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## amiller (Jan 1, 2009)

Shiny said:


> So expect to see a 3.5% rise in your motor, home & business insurance premiums!


Not quite.


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## Tricky Red (Mar 3, 2007)

It is high time that the insurance industry had a very good look at itself in my opinion. IPT is annoying for them but so is the shoddy work turned out by so called Insurance approved bodyshops for consumers. 

When you see some of the ridiculous costs for rectifying accident damage charged by bodyshops to insurance companies it makes my skin crawl.


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## Shiny (Apr 23, 2007)

amiller said:


> Not quite.


So expect to see a 3.5% rise in your motor, home & business insurance premiums *on level terms*


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## Shiny (Apr 23, 2007)

Tricky Red said:


> It is high time that the insurance industry had a very good look at itself in my opinion. IPT is annoying for them but so is the shoddy work turned out by so called Insurance approved bodyshops for consumers.
> 
> When you see some of the ridiculous costs for rectifying accident damage charged by bodyshops to insurance companies it makes my skin crawl.


Then surely they need to be taking a good look at the bodyshop repair industry?

It is a sad case that far too often garages will give a repair price which drops considerably when advised that it won't be an insurance job. This is wrong and takes advantage of insurers at the expense of policyholders.

But having seen a contract with a repair garage, permitted mark ups on parts, provision of courtesy cars, mileage payments on recovery, it can be a tight margin, but rewarded with a stream of business.

Insurers do constantly review approved repairers for both quality and cost and they do act on bad garages.

It is like everything, you don't get to hear about things that went as they should, but only when things go wrong. It's not exciting to read about a garage doing a satisfactory job in a satisfactory time leaving a satisfied customer. Yet these are the norm.


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## Tricky Red (Mar 3, 2007)

Shiny said:


> Then surely they need to be taking a good look at the bodyshop repair industry?
> 
> It is a sad case that far too often garages will give a repair price which drops considerably when advised that it won't be an insurance job. This is wrong and takes advantage of insurers at the expense of policyholders.
> 
> ...


Absolutely Shiny - totally agree. It is the whole industry that needs to be looked at. Agree with you on the non insurance pricing.


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## M4D YN (Nov 24, 2007)

Shafted nation


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## Shiny (Apr 23, 2007)

A friend of mine posted this about ipt, straight to the point...

_"A government that doesn't have the bottle to crank up fuel duty, so increases a stealth tax that most people didn't even know existed until yesterday.

A deceitful way to raise £1.6 billion."_


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## lofty (Jun 19, 2007)

Its a bummer, but I'd rather start paying a bit more tax here and there than end up having to live on €40 a day like the Greeks.


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## suspal (Dec 29, 2011)

Hypocrites the lot of them playing the blame game accusing each other that their policies are better than yours and visa.
The MP's have an easy life compared with the vast majority of the population I couldn't name one who couldn't afford paying an extra 3% robbing barstewards.


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