Insurance Premium Tax set to rise to 12%
In his Autumn Statement, Chancellor of the Exchequer Philip Hammond, announced that the standard rate of Insurance Premium Tax will increase by 2%, from the current 10% to 12%, with effect from June 2017.
The last increase in Insurance Premium Tax, from 9.5% to 10%, took effect on 1st October 2016. This latest increase will be the third rise in 18 months.
The increase aims to raise an extra £680 million in the next tax year and £840m the following year. The last increase, in October, was introduced to raise £700 million for flood defence spending this winter.
The June 2017 increase will affect everyone insuring property throughout the UK.
Some reports suggest this may encourage people to under insure their property in an attempt to keep down the cost of premiums. This is ill-advised as it is likely to have very serious and costly repercussions should you need to make a claim.
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