Premium Tax Rate On The Rise

Posted 05/08/2015

Premium tax in the UK is set to rise, and this is said to be resulting in an increase in rates by insurance providers. The increase is from the current 6% to 9.5%, a staggering 58% increase. This increase was not necessarily unexpected, as we have seen a trend in increasing tax rates similar to this globally, although the magnitude of the increase was a little disappointing for most.

That said, insurance tax rates in other countries, most notably those across Europe and the US are much higher than 9.5%, with insurance premium tax in the US topping 40%.

These increases are coming at a time when the insurance market is much stricter than it used to be, with more critical solvency requirements and increased regulation of insurance services across the board. It is a worry that these increases could open up the potential to cost cutting, with some insurers looking to exit to avoid the consequences of these steep tax increases.

Read more on the Business Insurance website.
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Premium Tax Rate On The Rise
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