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.”
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.
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