Budget 2010: IPT to rise

The standard rate will increase from 5% to 6%, while the higher rate is set to match the rise in VAT from 17.5% to 20%.

It is due to be introduced on 4 January next year.

Many industry figures had expected the basic rate to rise far more steeply, and even as much as double.

The current IPT raises £2.3bn in tax annually, although is not included on life and protection policies.