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Small businesses fear IPT budget hike - #IPTsUnfair

Press release   •   Oct 04, 2018 09:40 BST

Ahead of the Budget on 29th October, independent research commissioned by Allianz has revealed anxiety amongst SME business leaders that the Chancellor will increase Insurance Premium Tax (IPT) from its current standard rate of 12%.

85% of the 250 SMEs that took part in the research said they were concerned about the financial impact on their businesses if there is another rise in the rate of IPT.

The standard rate of IPT increased three times between November 2015 and June 2017 – rising from 6% to 12% and the fear is the rate could keep on rising. Higher rates of IPT are already imposed in other EU countries such as Finland (24%), Netherlands (21%) and Germany (19%) so the Chancellor does not need to look far for precedents to support an increase.

Dave Martin, Allianz’s director of SME and Corporate Partnerships said: “At a time of significant uncertainty for SMEs about what the future holds post Brexit, we are calling on the Chancellor not to increase the tax burden on businesses by increasing Insurance Premium Tax.”

The survey also showed the unpopularity of the tax because of its underlying unfairness. 76% of SMEs agree IPT is a tax on prudent businesses that take out insurance to protect their property and people.
The suggestion that IPT is also something of a stealth tax is supported by the research finding that nearly 1 in 3 small businesses did not know they are paying it.

Dave Martin added: “We hope our broker partners will flag up to SMEs the level of IPT in the overall cost of their insurance and the unwanted role of tax collector the industry plays on behalf of the government.”

Explaining what prompted Allianz to commission the survey, Dave Martin said:
“As a leading provider of SME insurance it’s important we understand the demands our customers face and show we are in a partnership with them. IPT is clearly a significant financial burden on businesses and we want to show we’re trying to do something about it.”

Ends.

Media Notes:
1. The research was carried out by the independent research company OnePoll between 11-18 September 2018. 250 SME business leaders took part in the survey. www.OnePoll.com

The information contained in this press release relates to Allianz Insurance plc. Allianz Insurance plc is one of the largest general insurers in the UK and part of the Allianz Group.

The Allianz Group is one of the world's leading insurers and asset managers with more than 88 million retail and corporate customers. Allianz Group customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz Group is one of the world’s largest investors, managing over 650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors and PIMCO manage an additional 1.4 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we hold the leading position for insurers in the Dow Jones Sustainability Index. In 2017, over 140,000 employees in more than 70 countries achieved total revenue of 126 billion euros and an operating profit of 11 billion euros for the group.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary note regarding forward-looking statements

The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements.

Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events), (iii) frequency and severity of insured loss events, including from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the euro/US-dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.

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The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.

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