06 July 2009

Government urged to cut 'unfair' Insurance Premium Tax

A call has gone out to government to cut the 17.5% Insurance Premium Tax payable on travel insurance.

Specialist travel insurance firm P J Hayman claims travel insurance customers are being unfairly penalised.
 
The company argues that the IPT rate was initially introduced in an attempt to deter travel agents from giving holiday discounts on the condition that travel insurance was purchased as part of a package.
 
This forced customers to pay more for their travel insurance and use a specific provider.
 
But the rate is not only 2.5% higher than VAT but is 12.5% higher than for other types of insurance such as motor or household.
 
Company director Peter Hayman said: "It is important that the government reassesses the level of Insurance Premium Tax.
 
"Sales through travel agents and tour operators have been on the decline for many years and now represent less than 25% of the total market which means that there is now an unfair tax on travellers.
 
"With VAT currently at 15%, it makes no sense at all for IPT to be such a shockingly high rate."
 
by Phil Davies


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