The Executive Chairman of the Association of Medical Insurers and Intermediaries (AMII) has expressed relief that Chancellor Rishi Sunak has not increased Insurance Premium Tax (IPT) in his Spring Budget 2020 – but pledged the trade association would continue to lobby for lower rated healthcare products.
AMII Executive Chairman Stuart Scullion said: “We are pleased that Chancellor Rishi Sunak has not increased IPT – it would have been an easy decision to hit long-suffering employers, employees and consumers as a means of raising tax revenues.
“Against the current global health backdrop of the Covid-19 outbreak, an IPT rise would have done nothing to relieve any pressure on an NHS already on its knees. The Chancellor had the perfect opportunity to demonstrate his support for British Industry by reducing IPT on healthcare spend and support an already overstretched NHS.
“Moreover, while IPT has not increased in the 2020 Spring Budget, the UK still has the second highest IPT rates in Europe after Greece.
“Small and Medium Enterprises (SMEs) form the backbone of the UK economy. Increasing IPT rates would have been a folly as it would have impacted those employers who are investing in the health and wellbeing of their staff, by penalising employers’ bottom lines and employees through their Taxable Benefit in Kind.
“We await with interest details of the Government’s forthcoming consultation setting out the next stage in reforming how IPT operates.
“We will continue to lobby hard that healthcare costs should be zero rated for IPT purposes in line with Life products, as they make an equally valuable contribution to the health of the nation and the UK economy.”