In The Autumn Statement The Chancellor has announced that the rate of Insurance Premium Tax is to rise again. From 1st June 2017 the rate will increase to 12%. This is double the rate of 6% that applied up to November 2015 when it increased to 9.5% with a further increase to 10% in October this year.
PwC predict this rise will cost around £25 extra on the average cost of motor insurance alone.
The increase will hit consumers and business alike. The latter however will see the increase more than offset by the reduction in Corporation Tax. It is households that will feel the impact most especially at a time when household and motor premiums are rising.
The media will make much of this without looking at other tax measures which may offset the increases. However it is important to ensure that you review your cover and premium each year. This is what a broker does for you as a matter of course.
It is also essential to review the cover. When costs rise the cheapest option is not always the best.
If you are not already a customer of Mercia Insurance we would be delighted to talk to you.