Peter Hayman, director at specialist travel insurance and schemes provider P J Hayman (the company behind 24/7 travel insurance), comments on the changes to Insurance Premium Tax (IPT), announced in the budget.
Peter Hayman, director of P J Hayman, comments: “Today’s announcement of a rise in the standard rate of IPT from 5% to 6% for insurance products such as motor and home while raising the top level charged on travel insurance from 17.5% to 20% widens the gulf between different types of insurance. We feel increasing the already high rate of tax charged on travel insurance is unjust and could result in people travelling without cover thus risking huge costs should they fall ill, have an accident or be a victim of crime.
“We call for the standardisation of the tax rate across all forms of insurance. The current system deters consumers from purchasing sufficient cover due to elevated costs and hits people who have to pay higher premiums due to age, ill health or the decision to take a gap year. We ask the Government to think again about such disparities.”
“Now IPT will be charged at 20% on travel insurance, which is 14% higher than on other types of insurance such as house or motor. The higher rate was initially introduced in an attempt to deter travel agents from giving holiday discounts on the condition that travel insurance was purchased as part of a package, thereby forcing customers to pay more for their travel insurance and use a specific provider. Sales of travel insurance through the travel trade now represents less than one fifth of total premiums. Therefore, in our view, this is no longer a factor.”
Details of all P J Hayman’s products can be found on its website at http://www.pjhayman.com/