Insurance Premium Tax increase - 1st June 2017

Insurance Premium Tax (IPT) will rise from 10% to 12% in June 2017.
The increase was announced by Chancellor of the Exchequer, Philip Hammond, in the Autumn Statement — marking the third rise in less than two years.

• July 2015: Increased from 6% to 9.5%

• March 2016: Rose again to 10%

• June 2017: Set to rise to 12%

This upward trend continues to impact both businesses and consumers across the UK.

What Is the Impact?

The IPT increase represents a significant blow to businesses and households alike.
In recent years, insurance premiums had been falling, but that trend reversed last year — and this tax rise adds further pressure.

Many have labelled the rise in IPT a “stealth tax”, as it indirectly raises costs without increasing the actual insurance product value.

For more details, see the official government statement on the Insurance Premium Tax increase.

Who Will Be Affected?

1. Businesses

Businesses will face higher insurance premiums, which means:

• Increased operating costs

• Reduced profits, or

• Higher prices for products and services

Some businesses may also feel tempted to cut back on cover to save money — leaving themselves more exposed to risks such as fire, flood, or theft.

2. Consumers

For individuals, this tax rise will also hurt.
Experts estimate that the 2015 IPT rise added around £100 to the average family’s annual insurance bill — and this latest increase adds even more pressure.

It will particularly impact:

• Young drivers, who already pay high premiums

• Homeowners in flood-risk areas

• Those taking responsible steps to protect themselves and reduce the burden on the state

Our Approach

At Talbot Jones Risk Solutions, we are committed to transparency and fairness in how we work with clients.

We always provide clear breakdowns of costs when arranging insurance — including IPT where applicable.

In fact, we’ve helped clients reduce their IPT bills by switching from a commission-based model (where IPT applies) to a fee-based model (where IPT does not).

This not only helps minimise costs but also ensures clients:

• Understand exactly what they’re paying for, and

• Can evaluate the value of our advice and service.

If this approach appeals to you, we’d love to talk.

Get in touch
Or call us on 0191 438 7977 for further information or advice.