Emergency Budget: Chancellor announces IPT increase
Insurance premium tax will rise from five to six per cent, the Chancellor has announced in today's Emergency Budget.
The tax applies to private medical insurance but the exemption on other long-term insurance such as protection products remains in place.
The move may encourage more companies to avoid the tax by providing their employees with health cover through a trust.
Addressing Parliament today, George Osbourne announced that cuts to public spending would be the focus of the government's moves to tackle the budget deficit, rather than tax increases.
Spending on welfare has been targeted as a key area for savings, following a decade in which it has grown from £132bn to £192bn a year. The government will introduce a medical assessment for Disability Living Allowance from 2013 - a benefit that costs over £11bn a year and is claimed for by three times as many people today as when it was introduced 18 years ago.
The speech signalled the government's attempt to stimulate growth in the private sector, with incentives for business including a pledge to reduce corporation tax and the small companies tax rate.
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