The British population is currently faced with a plethora of tax obligations, to some extent that the event HMRC finds it difficult to maintain. With benefits frozen or cut, taxpayers are under immense pressure. This burden also extends to pet owners across the country, who are not spared the escalating tax burdens imposed by HMRC.
HMRC records rise in tax as duties and insurance costs for Britons
The rise in tax rates has put many Britons at risk the taxpayers under siege, especially since many allowances are either frozen or cut completely. Joe Neal, tax director at Blick Rothenberg, said: “HMRC made a record for income tax, National Insurance (NI), VAT and inheritance tax last year. Car, home, pet and private medical insurance are on the rise, with insurance premium tax (IPT) currently at 12%.
IPT rises to 20% on travel insurance and new cars bought from dealers, including insurance and electrical appliances. IPT is rising by 6% over a ten-year period, a considerable financial burden for many British families struggling with the ongoing Cost of Living crisis.
IPT income is increasing as most Britons are not aware of
As many as 84% of families pay IPT, but two thirds of them know little about it. According to tax receipts from HMRC, the income from Insurance Premium Tax has increased by 10% in 2023.
In the period from April 2023 to January 2024, the IPT accumulated a total of £6.5 billion for the Treasury, compared with £5.9 during the same period the previous year.
Cara Spinks, Head of Insurance at the OAC, said: “While consumers are set to see another squeeze on their family finances, the Treasury looks set to deliver another exceptional year of IPT receipts .Collections have topped £6 billion in 2021/22, £7 billion in 2022/23, and could now top £8 billion this financial year.
“In addition to rising costs, the health insurance sector has also experienced increasing demand for its products. The increased pressure on the NHS has seen more employers and individuals take out private health insurance and plans health fund to support continued health and speed up treatment.
“With the health of the nation and the workforce at the heart of the government’s promise to stimulate economic growth, the reduction or removal of IPT for health insurance products such as PMI and health insurance plans could support this goal by reducing economic inactivity due to chronic illness, also reducing the pressure on family finances.
