The Chancellor has decided not to touch Insurance Premium Tax in the Budget 2018, to the relief of many who had expected it to rise.
Currently levied at 12% on most general insurance premiums, IPT had doubled from 6% over the last 3 years.
The insurance industry had been lobbying the Government to freeze Insurance Premium Tax (IPT), with HMRC figures revealing that taxpayers are now paying record amounts of the tax.
Official tax receipts for August show IPT raised a massive £1.35 billion for HMRC in a single month – the highest amount ever and £200 million more than it raised in August 2017.
The Association of British Insurers (ABI) reported "the tax take from IPT for the last 12 months has now hit £6.13 billion, more than that brought in by sin taxes on beer, wine or gambling in the same period. The Treasury predicted revenues of £6 billion from IPT for the financial year 2018/19, so these new figures suggest that taxpayers are paying even more than expected".
Huw Evans, Director General of the ABI, said:
“Insurance Premium Tax is the mother of all stealth taxes. Despite insurance customers paying more and more of it, many people still remain unaware of it. Insurance customers are responsible people, abiding by the law and taking sensible steps to protect themselves, yet this responsible behaviour has been punished by repeated rises in IPT".
Thankfully the Chancellor has looked elsewhere in his efforts to balance the books on this occasion, a decision welcomed by MGC and those working in the insurance industry.