AMII chair renews call for zero-rated IPT

Insurance premium tax (IPT) should be zero-rated to reduce strain on the NHS as the country eases out of lockdown, according to the chairman of the Association of Medical Insurers and Intermediaries (AMII).

Speaking at the Association’s first virtual AGM, Stuart Scullion continued his call for the IPT rate to be brought into line with other long-term products, such as life and critical illness cover.

‘As has been evidenced by recent events, a strong private health sector delivers invaluable benefits, and reduces the strain on an already over-stretched NHS,’ he said.

The rate of IPT on general insurance products, including health insurance, doubled between 2015 and 2018 and currently stands at 12%.

In his Spring Budget Chancellor Rishi Sunak left the rate untouched and announced a further review of the application and fairness of IPT this year.

‘With the NHS taking the frontline strain of the coronavirus, it has fallen to independent private hospitals to step in and support routine and ongoing NHS treatments. That situation cannot prevail indefinitely.

‘At some stage the government is going to have to increase tax revenues in order to re-build our economy. Timing will be crucial, and I expect tax increases to be phased to ensure the recovery does not stall,’ said Scullion.

Scullion also praised insurers and cash plan providers for quickly ‘standing up to the task’ of enhancing benefits in the wake of the Covid-19 pandemic, ensuring products continue to deliver value, and introducing a range of financial support measures to help those consumers and businesses that are struggling financially.

‘I believe our insurers and cash plan providers have stood up manfully to the tasks and challenges posed by the current circumstances we find ourselves in,’ he said. ‘They have continued to ensure that products deliver value and have supported those businesses and consumers who need them most.’

The Association has spearheaded a range of initiatives to support member firms including an industry-wide scheme for the digital transfer of personal data and underwriting directly between insurers. 

The initiative, which includes both AMII and non-AMII members and already has the backing of 80% of the association’s insurer partners, is expected to be formally announced later this year.