The National Campaign Against Insurance Premium Tax (NCAIPT) is forecasting an increase in insurance...
The National Campaign Against Insurance Premium Tax (NCAIPT) is forecasting an increase in insurance premium tax (IPT) in Gordon Brown's Budget in April.
Philip Allott, NCAIPT project director, said the Treasury's figures forecast the amount of benefit the Government will receive from IPT in 2002/03 to be £1.8bn. Allott believes if the Treasury decides to increase IPT, it could rise from 5% to 10%, bringing it more in line with European rates.
'If Gordon Brown is aiming for another 10%, that will mean another £180m a year,' he said.
If NCAIPT fears are correct a hike could see PMI premiums rise even further. NCAIPT has been lobbying the Government to drop the tax, which it believes encourages cash-strapped consumers to cancel policies.
Allott added: 'It is those who can least afford to be without insurance who are resorting to cancellation. Our main short-term objective is to block a further increase in the levy, but the long-term aim is to secure the abolition of the levy.'
But Larry Bulmer, chairman of the Association of Insurance Intermediaries, thinks the 5% figure will remain.
He said: 'It has not been indicated that the Government will increase IPT. Gordon Brown needs more money, but I think the upper earnings limit on National Insurance contributions will be increased.'
