Even George Osborne didn’t wear high vis when he announced tax increases, but insurers are now using those yellow jackets to alert consumers to the king of the stealth taxes – Insurance Premium Tax – ahead of the Budget.
Despite raising more money than wine, beer, spirits or air passenger duty, polling suggests only one in three people know Insurance Premium Tax exists. The UK now has the sixth highest rate in Europe – not surprising considering the tax has doubled since 2015. The current rate of 12% is now costing households around £200 this year, on average. It also hits business, as unlike VAT, they can’t claim it back. No wonder the Federation of Small Businesses have said ‘it deters small businesses from taking on the protection they need’.
A further increase at this Budget would hit households and businesses who do the right thing and buy insurance, while those who don’t, pay nothing. This raid on the responsible can’t be right.
Insurers have made stopping another increase a priority and last week launched a new film which highlights the absurdity of punishing people for doing the right thing… with a little help from Britney Spears, the Queen, David Brent and Tom Jones*. It appears not even celebrity lawyers can save them from the Insurance Premium tax inspector…