Insurance Premium Tax – the tax that blocks access

Insurance Premium Tax (IPT) revenues are at a record high of £6.2 billion per annum. This unfair tax burden falls on both consumers and businesses alike and acts as a huge disincentive to the purchase of adequate insurance protection.

Research conducted by Zurich Insurance shows a clear correlation between steady increases in IPT in recent years and a decline in the uptake of insurance. Three significant increases to the rate of IPT in recent times, and BIBA’s response to the HMRC Operational Review of the tax, demonstrate that it has gone too far.



For Government to commit to freezing the rate of IPT at 12% for the duration of the Parliamentary term and to consider targeted IPT relief to encourage responsible behaviour.

(See Emerging risks and Road safety section 9.2).

“There is a string of unintended consequences when there is an increase in IPT: it affects charities, public authorities, businesses and individuals, disproportionately affecting those with higher insurance risks. Our research into the public and voluntary sectors, showed that 9 out of 10 respondents felt that any increase would negatively impact them financially, forcing them to make job cuts or cut budgets elsewhere, while nearly half said it would affect their organisations’ ability to adequately insure itself against the risks they face. The current inequitable rules on IPT – where insurance policies are subject to IPT but alternative models of risk transfer are exempt – also means that any increase distorts competition and choice for customers. It is not right that price, rather than quality of service and cover, should drive competition.” 


Chief Executive, Zurich UK

BIBA has more than 1,800 individually FCA regulated firms registered as members. 

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