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We are used to most tax changes being made from April each year but one tax - Insurance Premium Tax (IPT) – is an exception. The standard rate of IPT is to rise from 10% to 12% with effect from 1 June 2017. The latest increase will mean that the rate of IPT will have doubled in just over 18 months. It was only 6% in October 2015.
The additional revenues the increase will provide to the government are significant. Estimated additional annual receipts for 2018/19 and future years are £840 million. Total annual receipts are expected to rise to £6 billion in 2018/19. In 2013/14, total receipts were £3 billion. The rising importance of IPT is also illustrated by the estimates of receipts from other taxes. In 2018/19 estimated receipts from capital gains tax are £10 billion and inheritance tax is expected to raise £5.2 billion.
The Association of British Insurers has calculated that the previous rises in 2015 and 2016 could have added £45 to the annual insurance costs of a typical family with two cars, and combined contents and building cover.
More rises are on their way.
Why not contact Wilkes Tranter & Co Limited today for more information or a FREE no obligation quote.
The government has delayed the introduction of Making Tax Digital (MTD) for Income Tax Self Assessment (MTD for ITSA) for a year.
From April 2022, the government plans to create a new social care levy which will see UK-wide tax and National Insurance Contribution (NIC) increases.
As always, the wellbeing of our staff and clients remains our priority and is at the forefront of our mind when considering our response to the current coronavirus situation. At present our office remains open during normal working hours however we are discouraging face to face contact and are moving to telephone/ e-mail communication wherever possible in an effort to protect ourselves and our clients.
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Please be assured that we will be continuing to offer the best service and advice during this difficult period.
We will continue to closely monitor government advice on the situation and act accordingly.