BIBA pushes government to commit to a freeze on IPT

Ahead of the UK's Spring budget, the British Insurance Brokers' Association has called on the government to put a freeze on Insurance Premium Tax (IPT).

Related topics:  insurance premium tax,  ipt,  insurance,  Protection,  government
Rozi Jones
3rd February 2023
cracked ice
"[The] tax freeze could encourage investment in protection"

In its submission to HM Treasury ahead of the budget, which takes place on 15th March, BIBA has said that - while it recognises that a cut in IPT would not currently be possible due to the UK's economic challenges - a freeze on the tax would be 'responsible' and improve financial resilience for both consumers and businesses.

The body proposed a freeze for the remainder of the current parliamentary term.

For businesses, BIBA says, the tax freeze could encourage investment in protection again specific risks - especially for under-insured SMEs.

The submission says:

"As a lever to encourage increased investment by businesses that is essential for their growth and to help build resilience across the wider UK economy we urge the government to consider targeted relief from IPT to encourage businesses to purchase protection against emerging risks such as cyber. In the UK, the vast majority (95%) of businesses, in particular SMEs, do not have a standalone policy in place, and only 43% have some cyber cover as part of a wider policy."

The trady body also callefd for the government to grant IPT relief for consumers affected by issue of cladding on their high-rise buildings, adding that "the increased IPT receipts from these higher premiums provide a disproportionate ‘windfall’ for the Government that exacerbates the cost impact to consumers that could be eased by government action".

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