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Insurance coverage and financial savings commerce physique the ABI has referred to as on the Authorities to scrap Insurance coverage Premium Tax (IPT).
IPT applies to most common insurance coverage insurance policies, together with motor, residence, pet and Non-public Medical Insurance coverage.
The usual IPT fee has doubled to 12% because it was launched in October 2015.
Over two-thirds of individuals (67%) have little or no data of IPT, regardless of round 84% of UK households paying it, making it UK’s “hidden in plain sight” tax, based on the ABI.
Half of customers surveyed stated that they had little or no thought of the impression that IPT had on their insurance coverage prices.
On a £200 a month Non-public Medical Insurance coverage Coverage IPT would add £24 a month in value.
The ABI estimates that IPT receipts will surpass £8bn this tax 12 months, with present receipts up 10% vs the earlier monetary 12 months.
To finish Jan 2024 IPT has introduced in £6.7bn, in comparison with beer obligation (£3.1bn), spirit obligation (£3.7bn), tobacco obligation (£7.3bn) and playing tax (£2.3bn).
Mervyn Skeet, director of common insurance coverage coverage, on the ABI stated: “It’s excessive time we unmask this tax which penalises individuals and companies for being accountable.
“This tax hits the poorest hardest as a result of they usually spend extra on insurance coverage, corresponding to residence and motor cowl, as a proportion of their earnings.
“There has by no means been a greater time for the federal government to indicate its assist to the tens of millions of house owners and companies who do the appropriate factor by shopping for insurance coverage. We must always minimize IPT now.”
To energy its marketing campaign calling for a minimize in IPT, the ABI has created a mascot, named Snippy.
Created by the costume manufacturing group behind the hit ITV present ‘The Masked Singer’, Snippy is a human-sized pair of scissors billed by the ABI as serving to to ‘unmask’ IPT as a tax that punishes accountable selections.
• The ABI and OnePoll surveyed 2,000 insurance coverage clients.
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