UK Businesses Ask Brown To Slash Insurance Tax

by Jason Gorringe, Tax-News.com, London

07 March 2002

Representatives of the UK business sector on Tuesday appealed to Chancellor Gordon Brown to reduce the tax on insurance policies which he increased to 5% three years ago.

The Engineering Employers Federation called for the insurance premium tax reduction in order to offset the massive surge in premiums since the events of September 11. The industry body revealed that an increase in the number of workplace lawsuits, poor weather conditions, and larger fire losses had also contributed to rising premium costs.

Speaking earlier this week, EEF Chief Economist Stephen Radley observed that: 'The Government could reduce IPT,' adding that: 'Clearly if premiums are going up massively the Government gets a windfall.'

According to estimates, the insurance premium tax is likely to raise around £1.8 billion this year. However, the Treasury Department failed to offer a response to the business sector's pleas, explaining that it is unable to comment on the issue ahead of the budget in April.

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