On 1st June, the IPT, a tax on general insurance premiums, will increase from 10 to 12 per cent, meaning the tax has doubled in just 18 months. This increase will affect 27 million households, 17 million drivers and most businesses, potentially increasing their insurance premiums, according to the British Insurance Brokers’ Association (BIBA).

When this latest hike was announced as part of the Autumn Statement 2016, BIBA called it a ‘hammer blow for the hard-pressed’. This hike threatens to force many individuals, households and businesses to significantly reduce or completely forgo their insurance cover, according to a recent survey of BIBA members.

Depending on the repercussions of the hike, it could weaken the government’s intention of generating an additional £7 billion for the UK treasury. Whilst the potential effects of the increase are still speculative at the moment, it is nevertheless important to be aware of the specifics of the hike and its potential impact.

To discover the potential repercussions of the tax hike and the insurance industry’s response to this hike, continue reading below:

Insurance Premium Tax (IPT) Increases 1st June