Insurance Premium Tax

Insurance Premium Tax rise: Minimise the impact

June 2017 has seen the third Insurance Premium Tax (IPT) rise in 19 months.  The price has now doubled since 2015 and now stands at 12 percent.

So how is this affecting your business?

Chancellor Philip Hammond announced the rise in the charge along with a government crackdown on fraudulent whiplash claims, but the implications are now being felt far beyond motoring.  Those who purchase business, property, pet and health insurance have all been dealt the blow.

The increase is significant enough to potentially wipe out no claims discounts that businesses accrue this year, leaving you back where you started 12 months ago.  This means it has become even more important than ever to benchmark your price.

Businesses don’t market test their insurance provider often enough in the UK.  We typically find businesses tend to accept marginal increases in their premium if, perhaps, it is in line with inflation.  As cost saving experts, we would always advise against this, but especially now that the IPT increase is taking hold.

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​The best way to avoid the rise in price is to benchmark your costs by doing a confidential review  as Phil Andrew, GAS’ Head of Customer Experience, explains: “By obtaining a confidential quotation businesses’ can ensure they are getting value for money and also obtain a free expert analysis of their insurance programme.  Companies who have taken up this offer have usually saved 20% or more off their expiring insurance premiums.

“It’s always our goal at GAS to get a great deal for our clients and sometimes it can turn out to be quite easy.  Those who haven’t benchmarked their insurance providers thoroughly for a few years fall firmly into this category.”

We regularly hear consumer advice from the government compelling people to switch their energy, phone and insurance contracts.  Ironically, businesses should now be using these tips more than ever to avoid cost increases imposed by the government.

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