The UK Chancellor yesterday raised insurance premium tax (IPT) by 0.5% and stated that the money raised should be used in flood-damaged towns. Last November, the rate was also raised from 6% to 9.5%. A leaked document recently suggested that government cuts might be putting an increased number of households at risk from flooding. The IPT is levied on all general insurance policies. The treasury claimed that, if passed on to customers, the average home and contents policy would increase by £1 and the average motor insurance policy by £2 per year. In a statement yesterday, Mr Osborne said: “While we are not proposing any new taxes, it seems clear that there will have to be some kind of additional charge for flood insurance.
The UK Chancellor yesterday raised insurance premium tax (IPT) by 0.5% and stated that the money raised should be used in flood-damaged towns. Last November, the rate was also raised from 6% to 9.5%. A leaked document recently suggested that government cuts might be putting an increased number of households at risk from flooding.The IPT is levied on all general insurance policies. The treasury claimed that, if passed on to customers, the average home and contents policy would increase by £1 and the average motor insurance policy by £2 per year. According to the Association of British Insurers, last November’s increase added £14 to average motor policies and £10 to home contents cover.