The Budget’s Insurance Premium Tax (IPT) is coming under more scrutiny and along with it more warnings to consumers. Apparently the insurance tax will hinder the ability of consumers to afford important coverages. For example young drivers needing insurance or the self employed needing health insurance. Many are calling for a freeze to be included in the Budget for some categories of insurance.
Former minister Christopher Chope said the tax rise from 5 per cent to 6 per cent could result in fewer people obtaining health insurance which in turn further burdens an already burdened NHS. Mr. Chope is calling for Insurance Premium Tax to be frozen for categories of health and vehicle insurance policies. The pressure to obtain the freeze is on since the tax rate increase is set for January 2011. The increased tax revenue is expected to raise 400 million pounds a year.
Mr. Chope further provided examples that should the tax go as planned without the freeze that young drivers who could not afford insurance would drive uninsured and people who could not afford insurance would burden the NHS and therefore the taxpayer. Former Cabinet minister John Redwood said the vehicle tax would further burden and already heavily-taxed driver.