Further increases in the rate of Insurance Premium Tax (IPT) in the Chancellor’s forthcoming budget would hit farmers and country people disproportionally hard, warns NFU Mutual.
The rural insurer is concerned about suggestions of a further rise in the rate of Insurance Premium Tax in the forthcoming budget on November 22.
“We are very concerned that repeated rises in IPT are putting an unfair burden on people who have to use vehicles to live and work,” said Lindsay Sinclair, NFU Mutual Chief Executive.
“Since 2005, the Chancellor has increased IPT from 6% to 12%, as a means of increasing Government funds without increasing headline income tax of VAT.
“The countryside relies on vehicles - whether you use a car to get to work, are retired and need to get to a hospital appointment, or are a farmer using tractors, quad bikes and combine harvesters to produce food for the nation.
“All these vehicles need insurance and ever-higher rates of IPT are placing an unfair burden on country people – particularly young people who often need to drive to get to work because bus services are not an option in many parts of the countryside.”
For a rural homeowner with a medium-sized car living in the countryside, IPT typically adds over £100 to their annual costs at today’s rates.
For a large farm business with a fleet of tractors, a quad, a 4 x 4 vehicle and a combine harvester in addition to buildings, stock and equipment, IPT could add over £1,000 to their costs.
