06 June 2017
Insurance Premium Tax rise ‘to weigh on small businesses’
The next government should avoid further increases in Insurance Premium Tax (IPT), a trade body has suggested, in order to support small companies.
With the tax rising to a level of 12% this month, the Federation of Small Businesses (FSB) has indicated that there should be no fresh rises in the next Parliament.
Mike Cherry, FSB national chairman, said IPT has doubled over the last five years, adding to the cost of doing business.
He said: " Having absorbed a recent rise in the National Living Wage and a business rates revaluation, there will no doubt be many small firms thinking twice about taking insurance policies as a result of this tax grab. If insurance premiums continue to increase, small business take-up of insurance will dip, and it will be those most at risk that will be affected."
He said small companies are unable to claim back costs linked to IPT, while it impacts everything from vehicle insurance to flood coverage.
Mr Cherry concluded that it is among the hidden costs which could be keeping the UK's entrepreneurs awake of a night.