P J Hayman, specialist Travel Insurance and Schemes provider calls on the new Government to reassess the level at which Insurance Premium Tax (IPT) is charged on travel insurance.

Peter Hayman, director of P J Hayman, explains: “With the new coalition Government currently reviewing spending and revenue, many forecasters believe that the 5% tax rate on general insurance will be at least doubled in the emergency budget due on 22nd June. We call for the Government to properly consider the impact of any significant increases on the price of insurance policies and advise against any rises that will cause people to risk neglecting their levels of cover.

“With budgets currently tightly stretched for most people, significant rises in the cost of policies risk people viewing insurance as an extravagant extra that they can do without. In the long term, this could leave a large number of people much worse off in the event of an accident or incident.

“We also call for the standardisation of the tax rate across all forms of insurance. Travel insurance is currently taxed at 17.5% which is 12.5% higher than general insurance but a review of the level at which insurance is taxed would be a good opportunity to fix this anomaly. The current system penalizes those consumers who seek to take a responsible approach to travel and purchase sufficient cover and in particular hits people who have to pay higher premiums due to age or ill health. We ask that the Government carefully consider the implications of any changes.”