The upcoming Autumn Budget's proposal to raise Insurance Premium Tax will hit farmers and rural businesses "hard", NFU Mutual has warned.
Increasing the rate of Insurance premium Tax (IPT) in the Chancellor’s forthcoming pre-Brexit budget is "very concerning", the rural insurer said.
NFU Mutual, which protects over 75% of the UK’s farmers, is concerned that the chancellor could be planning a further rise in the rate of Insurance Premium Tax in the forthcoming budget on October 29.
The organisation highlighted how repeated rises in IPT are putting an "unfair burden" on people who live and work in rural areas.
Since 2005, the Chancellor has doubled IPT from 6% to 12% as a means of increasing Government funds without increasing income tax or VAT
Lindsay Sinclair, NFU Mutual Chief Executive said: “Many people probably don’t realise that their insurance premiums already include hundreds of pounds of ‘hidden tax’ every year.
“For farmers, small businesses, homeowners and motorists this stealth tax unfairly penalises all those who act responsibly by taking out insurance.
He added: “It’s especially hard on people living in the countryside who need to use vehicles to get to work, take children to school or are using tractors, quad bikes and combine harvesters to produce food for the nation.”
For a rural homeowner with a medium-sized car, IPT typically adds over £200 to their annual costs at today’s rates.
For a large farm business with a fleet of tractors, a quad bike a 4 x 4 vehicle and a combine harvester in addition to buildings, stock and equipment, IPT could add over £1,000 to their annual costs.
Next week's Budget will be the final government spending plan announcement before the UK officially leaves the EU in March 2019.
