December 6th, 2010
Insurance premium tax (IPT) is a tax paid by people taking out insurance from insurance brokers and insurance companies. When the tax rates go up so do our policies. It is unavoidable. Not all insurance is taxable but health insurance is and this year the Government announced that IPT on health insurance is to rise from 5% to 6% as from 4th January 2011.
As far as Freedom Healthnet health insurance policies go the news is not all bad. Despite the new increase, people who take out a policy between now and the 4th of January next year will only have to pay the 5% rate on their policies until their next renewal date. The same applies to anyone who has to renew a policy before this date. A statement from Operations Director, Hooshiar Mires of Freedom Healthnet says:
“To clarify, the IPT rate change effective 4 January 2011, Freedom Healthnet Insurance use the following two examples:
1. Policies that incept or renew on or after 04/01/11 will be charged a IPT rate of 6%
2. Policies that incept or renew prior to 04/01/11 will be charged a IPT rate of 5% until they renew in their next corresponding policy period.”
This means that anyone taking out health insurance up to midnight on 3rd January will have the additional 1% IPT for the period of 2011 paid for by Freedom Healthnet.
The aim of the increases is to help the Government raise funds to help decrease our deficit. It is thought that this new taxation measure will help to raise £0.5 billion a year for the Treasury by 2014-15.
Tags: freedom healthnet, health insurance, health insurance tax, insurance premium tax, IPT
Posted in Medical Insurance Policy, Private Health Insurance | No Comments »
August 8th, 2010
There is a planned 1% rise in insurance premium tax (IPT) that will affect all health / medical insurance policies from 4 January next year.
The government has proposed raising IPT from 5 % to 6% from the next year and it expected that this will be confirmed in the forthcoming Finance Bill. The insurance industry, however, is worried that this is just the start of hikes in the tax on insurances and that the government is moving towards a consistent level of taxation across all sectors of the economy.
Health and medical insurance has benefited from a low level of taxation, which has helped to keep it affordable. Health insurance is a necessity for many people to ensure that they can get treated promptly and get back to work swiftly, without having to take a loss in earnings. However some would argue that it is a luxury item and be taxed as such.
There is currently discussion within the industry about how insurance providers will handle this uplift in IPT. Will it affect holders of an existing policy? Will they pay the increased IPT rate as from 4th January, creating an administration nightmare for insurance companies who would have to collect increased premiums from clients OR would the increased IPT rate only come into effect upon renewal after 4th January and on new policies from 4th January?
Additionally, with an increase in IPT on the cards, will this affect the decisions by employers to have a company health insurance scheme? Will that extra 1% for corporates with significant numbers of employees mean the difference between scrapping the scheme or continuing it in these challenging times?
Tags: Company Medical Insurance, IPT, Private Health Insurance
Posted in Company Medical Insurance, Private Health Insurance | 1 Comment »
