Budget: Insurance Premium Tax
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.INSURANCE PREMIUM tax (IPT) will rise by 1 per cent to 5 per cent in July adding, pounds 3 to the cost of a typical motor contract of pounds 315 and a similar amount on an average home insurance policy of pounds 285.
The Chancellor said this week that the vast majority of insurance products would continue to be exempt from IPT.
However, insurers argued that the tax, which is levied on motor, property, travel and extended warranty policies, would affect every household. One study claimed the increase would mean an extra pounds 10-15 a year in tax.
IPT was introduced in 1994 and pegged at 2.5 per cent. Last year, the Government raised IPT for travel insurance to 17.5 per cent.
A spokesman for Direct Line said: "Unlike VAT, insurance premium tax is not recoverable and, as we have consistently maintained in the past, it is unrealistic to suggest that insurers can absorb the tax."
Teresa Hunter
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments