BIBA astonished that the revenue raised by previous IPT increases needed to strengthen flood defences.

16th March 2016

BIBA, on behalf of our members and their customers, is astonished that the Chancellor decided that a further increase in IPT is required to strengthen the nations flood defences.  Today’s announced increase in IPT means that, year on year, insurance buyers face an increase in tax of 66.6% since March 2015.

Previous research by BIBA member, the AA, among 29,000 drivers found that 87% of motorists believed the tax was unfair and that increases will encourage some drivers to attempt to drive without insurance.

Steve White BIBA CEO said: “Let’s be clear about this IPT is a tax collected and remitted by insurers, it is a tax on premiums paid by policyholders –motorists, householders, and businesses large and small.  Whilst we support the additional spending on flood defences we believe that this could have been funded by the projected £1.5bn annual funds paid to the exchequer as a result in the increase in IPT put in place only last November which puts an increased burden on policyholders many of whom are suffering from ongoing flood damage. “

ENDS

Notes to editors

  1. For further information please contact:BIBA press office:
    Pam Quinn, Communications Manager
    020 7397 0223
    quinnp@biba.org.uk
  2. About the British Insurance Brokers’ Association

The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance intermediary organisation representing the interests of insurance brokers, intermediaries and their customers.

BIBA membership includes just under 2,000 regulated firms having merged with the Institute of Insurance Brokers (IIB) in November 2011.

General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff.

54% of all general insurance is sold by an insurance broker and they arrange 78% of all commercial insurance business.

Insurance brokers put the client’s interests first, providing advice, access to suitable insurance protection and risk management.

BIBA helps more than 250,000 people a year to access insurance protection through its Find a Broker service, both online and via the telephone.

BIBA is the voice of the sector advising members, the regulators, consumer bodies and other stakeholders on key insurance issues.

  1. Standard IPT rates
  • 1 April 1997 to 30 June 1999 – a standard rate of 4%
  • 1 July 1999 to 3 January 2011 – a standard rate of 5%
  • 4 January 2011 to 31st October 2015 – a standard rate of 6%
  • From 1 November 2015, the standard rate is 9.5%
  • From 2016 the standard rate is 10%

 

A selective rate in line with VAT applies to certain classes of insurance including travel insurance and certain exemption to IPT also apply