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Insurance Premium Tax absent from Spring Statement

Insurance Premium Tax absent from Spring Statement | Insurance Business UK

Insurance Premium Tax absent from Spring Statement

There was no mention of the Insurance Premium Tax (IPT) during Chancellor Rishi Sunak’s Spring Statement 2022 speech on Wednesday. This despite the constant lobbying of the likes of the British Insurance Brokers’ Association (BIBA).

Launched in January, BIBA’s 2022 Manifesto features a section focussed specifically on IPT.

“We believe that reducing IPT will result in a higher take-up of insurance protection; we ask for targeted relief from IPT on telematics policies; property insurance for cladded buildings and cyber insurance; we ask that the rate of IPT on travel insurance is brought into line with other insurance,” said the trade body at the time.

However, IPT was not mentioned during the Chancellor’s speech even as he introduced a new tax plan.

At the House of Parliament, Sunak stated: “I told the House last Autumn my overarching ambition was to reduce taxes by the end of this Parliament. And we will do so – in a way that is responsible and sustainable. Today, I am publishing a tax plan.

“We will take a principled approach to cutting taxes: maintaining space against our fiscal rules – as I have done today; continuing to be disciplined, with the first call on any extra resources being lower taxes, not higher spending; and, of course, carefully considering the broader macroeconomic outlook.”

“With those principles in mind,” he continued, “our new tax plan will build a stronger economy by reducing and reforming taxes over this Parliament, in three ways: first, we will help families with the cost of living; second, we will create the conditions for higher growth; and third, we will share the proceeds of growth fairly, ensuring people are left with more of their own money.”

Insurance was cited when Sunak announced that he is increasing the National Insurance threshold this year by £3,000. Insurance was also referred to when the Chancellor talked about the sanctions against Russia.

Commenting, accountancy and business advisory firm BDO UK said: “The Spring Statement did not turn into the mini-Budget that some had expected.

“A number of significant announcements to support households through the ‘cost of living’ crisis were the immediate priority. The Chancellor also promised plans to encourage business investment and more favourable tax rates in the medium term.”