UK Specialist Travel Insurance and Schemes provider, P J Hayman is urging the government to lower the 17.5% Insurance Premium Tax (IPT) that is payable on all travel insurance premiums.
This rate was initially introduced in an attempt to deter travel agents from giving holiday discounts on the condition that travel insurance was purchased as part of a package, thereby forcing customers to pay more for their travel insurance and use a specific provider. However this rate is not only 2.5% higher than VAT but is 12.5% higher than for other types of insurance such as motor or household, and as a result, travel insurance customers are unfairly penalized.
Peter Hayman, director of P J Hayman, said:
“It is important that the Government reassesses the level of Insurance Premium Tax. Sales through Travel Agents and Tour Operators have been on the decline for many years and now represent less than 25% of the total market which means that there is now an unfair tax on travellers. With VAT currently at 15%, it makes no sense at all for IPT to be such a shockingly high rate.”
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