This increase is considered a necessity by the government, but a surprise ‘stealth’ tax by industry insiders. Osborne is confident that this rise in IPT will benefit the UK economy, arguing that it brings the UK’s IPT in line with other countries. In fact, at 9.5%, the UK still has one of the lowest IPT rates in Europe – France’s IPT rate is 11.6% and in Germany it is 19%.
The new standard IPT rate of 9.5% will apply to all qualifying premiums from 1st March 2016 and to some insurance premiums starting on 1st November 2015, so the impact of this rise is already starting to hit.
This rise in IPT puts further pressure on insurers who are already operating on slim margins with record low investment returns, and will inevitably result in insurance premium increases.
The risk for businesses, facing similar trading conditions, is they cannot justify or afford a significant increase in their insurance spend and as a result may look to reduce their cover, with possibly disastrous consequences.
There is some good news as there are ways to mitigate the impact of this rise and we can help.
A review of the risks to your business to ensure you are getting best value out of your insurance spend is key. There’s no need to wait until your forthcoming renewal for the inevitable bad news of increased premiums, contact us now for a review of your business to find out how we can help.
Castlemead is an independent insurance broker with over 25 years history of professional service and advice to our clients. We pride ourselves on our innovative approach to solving our client's insurance issues whilst maintaining a traditional approach to client service.