Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • March 2016
03

Chancellor accused of seeing insurance premium tax as a 'soft target'

Open-access content Wednesday 16th March 2016 — updated 5.50pm, Wednesday 29th April 2020

The insurance industry has criticised chancellor George Osborne’s decision to increase the standard rate of insurance premium tax (IPT) by 0.5% to fund investment in flood defences.

2


This means IPT will go up to 10% on 1 October. The tax jumped from 6% to 9.5% in November last year.

RAC insurance director Mark Godfrey said: "The chancellor clearly sees IPT as a soft target, presumably as a result of getting away with raising it last summer with very little complaint from consumers or the insurance industry."

In today's budget statement, Osborne stressed the need to raise the tax because existing budgets would not be enough for flood spending, adding: "That's a £700 million boost to our resilience and flood defences."

He also said an urgent review was already underway by the environment secretary and the chancellor of the Duchy of Lancaster on how the money is best spent. 

Osborne's announcement on flood spending came after a series of extreme weather events taking place in December, such as Storms Desmond and Eva. 

The British Insurance Brokers' Association was 'astonished' with the IPT rise and warned this would affect policyholders. 

Mark Holweger, managing director at Legal & General, agreed this would ultimately impact customers, but welcomed the fact that the extra revenues would be diverted to flood defences. 

He added: "As an industry we've benefited from several years worth of benign weather conditions, with the flooding we saw in 2015 more representative of a normal year. It is therefore vital that insurance companies are pricing for long term weather events."

Huw Evans, director general of the Association of British Insurers, described the news as "disappointing".

"Increased investment in flood defences is vital but should be part of core government expenditure, not an afterthought paid for by raising taxes on people and businesses who do the responsible thing in protecting themselves through insurance," he said.

"We will be examining the detail closely to ensure the revenue raised is actually spent on new flood defence schemes."

This article appeared in our March 2016 issue of The Actuary.
Click here to view this issue
Filed in:
03
Topics:
General Insurance

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ