IPT to rise in Emergency Budget?

Richard Asquith

As speculation mounts on an increase in VAT in the Emergency Budget later this month other taxes also face close scrutiny from the Treasury. Insurance Premium Tax charged as a percentage of the gross premium on most insurance contracts will be a likely candidate. At 5% on most insurance classes the UK rate lags far behind most other European Union countries although for some classes of insurance (e.g. certain travel contracts) it is set at the VAT standard rate 17.5%. The figure below shows how the UK's standard rate lags far behind the common EU rate of 9%. In German and Italy the IPT rate is around 20% — matching the local VAT rates.

The Treasury will be stress testing all taxes for their potential to bring in much needed funds. With the Government facing having to reconcile a deficit of over £150...

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