Insurance premium tax costs you over £200 a year, yet half the population don't know it exists

It costs each household more than £200 every year, it raises more than beer and cider duty and it's rising faster than taxes on cigarettes - but half the population have never heard of Insurance Premium Tax.

Levied at 12 per cent on most general insurance premiums, IPT has doubled in the past three years - meaning policyholders are paying on average six per cent more for insurance than they did in 2015.

To put that into perspective, health insurance today costs on average £117 more per year than it did three years ago, while comprehensive motor cover has risen by £25 and the cost to insure the family dog has gone up by £20.

When put together, the added costs to households represent a significant outlay - and experts worry the tax rate may rise again in this month's budget.

One in 10 had charities and public sector bodies have had to cut staff since the tax has doubled

On top of this, think tank the Social Market Foundation - which crunched the figures on IPT - claims the tax disproportionately affects the poorest in society.

Its analysis of data from the Office for National Statistics has revealed that the poorest 10 per cent of society spend 3.1 per cent of their disposable income on insurance, excluding life insurance, which is exempt from IPT.

By comparison, the richest 10 per cent spend just 1.7 per cent of their disposable income on insurance. 

To make matters worse if you live in an area with high poverty, costs like home and car insurance are more expensive - and as IPT is proportionate to the premium paid, this just adds to the pressures for people on low incomes.

It's not just households who have been feeling the pinch since the tax has doubled. 

A study by Zurich Municipal found that a quarter of public services and charities have cut their level of insurance since 2015, when the tax was set at six per cent.

The survey found that nearly two in five public and third party organisations had to make tough decisions to cut budgets in their organisation and nearly one in 10 had to make job cuts in order to cover insurance costs.

One in five have comparably less cover in place as a result of the IPT rises, which leaves them exposed to higher expenses from claims. 

Andrew Jepp, managing director at Zurich Municipal, said: 'Public sector organisations and charities are struggling to maintain the level of service and the required level of insurance protection as a result of repeated rises in IPT since 2015. 

'The increasing costs from insurance taxation is forcing the public and voluntary sectors to make very tough decisions to reduce or cancel cover and increase excesses.

'This means they expose themselves to more risk which may leave them vulnerable to greater financial losses if the unfortunate happens.'  

Experts are concerned that Chancellor Philip Hammond may decide to further hike IPT in this month's Budget on 29 October.

The fact that this will be the last pre-Brexit fiscal announcement coupled with pressure to keep the Prime Minister's promise to inject a further £20billion into the NHS by 2023 means tax hikes are expected.

There is usually a reluctance from policymakers to raise well-known and unpopular taxes such as VAT, income tax and fuel duty - making IPT a prime target. 

Insurance Premium Tax has shot up over the last two decades from 2.5 per cent to 12 per cent

Huw Evans, director general of the Association of British Insurers, said: 'The Chancellor should realise a raid on the responsible is the wrong way to balance the books.

'People buy insurance because it is a legal requirement or because they are wisely protecting their homes, businesses, families and health. Punishing these people with another tax rise would be inexcusable. 

'Given the need to fund the NHS it would be particularly counter-productive to make health insurance even more expensive, forcing more people to rely on over-stretched NHS resources.'

IPT is a government-introduced tax on insurance policies, which was introduced in 1994.

It was introduced as it decided the insurance industry wasn't paying enough tax – unlike other businesses, insurance isn't subject to VAT.

Ever since IPT began to rise significantly in 2015, there have been calls to make certain groups exempt. 

Young drivers have been hit particularly hard by the tax rise. On average, a 17 to 24-year-old driver will now pay £1,324 a year for insurance.

Compare The Market recently called for this age group to be exempt from IPT when purchasing motor insurance, while trade body Biba has argued that young drivers using telematics products shouldn't have to pay.  

Biba's Graeme Trudgill said: 'Young drivers using telematics devices are three times less likely to crash in their first year of driving than those not using telematics.

'This increase in road safety actually saves the Government money through a decreased burden on the NHS. 

'These savings to Government could be even higher if we were able to increase the take up of telematics and we call on the Chancellor to remove IPT from telematics based motor insurance for the under 25s to drive forward their use.'

The amount of tax you pay on most types of insurance is now set at 12 per cent – things like car, pet and home cover all fall under this bracket.

There's also a higher rate of tax, at 20 per cent, which covers things like travel insurance and certain specialist types of motor insurance, such as for vehicles designed for people with disabilities.

A small portion of the income raised is ring-fenced to pay for flood defences, but the majority goes straight into the Treasury's coffers.

And IPT is extremely lucrative for the Treasury – it raises £4.8billion a year, which is more than beer and cider duties, betting and gambling duties, and air passenger duties. 

Roughly half of this is paid for by consumers, the equivalent of £89 per household. The rest is paid for by businesses. 

When the added costs to business are filtered down to customers, the Social Market Foundation estimates that IPT costs each household over £200 per year.

And according to OBR projections, IPT is set to raise more for the Government's coffers than inheritance tax will over the next three years.

Despite this, an Opinium survey found that half the population is unaware that IPT exists – far more than any other tax.

Graeme Trudgill, of the British Insurance Brokers' Association, said: 'We consider IPT to be an unfair tax that has the most negative effect on those who can least afford it and we continue to impress on Government the need to freeze this regressive tax.' 

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October 12, 2018

Sources: Daily Mail

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Or lose their independence because their ways of coping simply don't work in a digital economy? </p><p>I don't think that's a society that many of us would want.</p><p>In fifteen years, changes to the payments landscape mean that we will pay for things tomorrow in very different ways than we do today.</p><p>This change needs to be managed properly, not just by encouraging innovation which enables more people to participate in the digital economy, but also by planning for a viable cash infrastructure which means people aren't left behind.</p><p>We can be creative in how this is done, and it's going to require us to bring together banks, government, the post office, charities and regulators to work together on solutions.</p><p>Without this happening, a cashless future, and its negative consequences, could happen sooner than we think. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 October 18, 2018
  • Slum landlord fined £22,000 for leaving tenants with no fire alarms and no glass in the windows

    Slum landlord fined £22,000 for leaving tenants with no fire alarms and no glass in the windows

    000 for leaving tenants with faulty electrics, no fire alarms and no glass in their windows.</p><p>Following a complaint from a tenant, a environmental health officer inspected the property in Islington to find eight unrelated occupants sharing kitchen and bathroom facilities - against regulations. </p><p>There were also multiple broken items, including a bedroom window with no glass, no working fire detection system or fire blanket in the kitchen, and a cracked electrical plug socket in the living room. </p><p>The property contained dodgy electrics, no fire alarms and window panes without any glass </p><p>The landlord, Mr Kuppusami Selvarajan, of Abbotswood Gardens, Ilford, was found guilty at Highbury Corner Magistrates Court and sentenced to pay an £8,500 fine.</p><p>The property managing agent, S3A Management, was ordered to pay a fine of £7,650. </p><p>The defendants were also ordered to pay the council's legal costs of £5,773, bringing the total fines and costs to £21,923.</p><p>Councillor Diarmaid Ward said: 'Everyone has the right to safe, genuinely affordable housing and Islington will not tolerate dodgy operators taking advantage of people's desperate need for a home.</p><p>'It's unacceptable for landlords to rake in rent from vulnerable people living in rundown, unsafe spaces and where we find unacceptable conditions we will act to protect tenants.'</p><p>It's not the first time a rogue landlord has been caught operating in the borough.Just last month two men were charged after 35 people were found living in a single semi-detached house, with up to five or six people sleeping in the same rooms.</p><p>The converted semi had no fire alarm system and fire hazards including dangerous electrics</p><p>35 people were crammed into one house, with up to six people sleeping in the same rooms</p><p>The building had no fire alarm, new room partitions that were not fire resistant, and fire risks including dangerous electrics. There were also broken windows. Occupants did not have tenancy agreements and paid rent in cash.</p><p>Neighbours had contacted the police and landlord Arun Bajaj about anti-social behaviour at the house a number of times in 2016, finally contacting Islington Council 'after the disturbances became so frequent and extreme we were fearful for the safety of our family'.</p><p>Earlier this year, a separate property company in the borough was ordered to pay £304,458 after converting a single dwelling into five flats without planning permission.</p><p>An HMO stands for a house in multiple occupation. It is any property let to five or more tenants who come from two or more different households and at the moment, licensing only applies where the property is three or more storeys. </p><p>Examples would be typical student housing and properties let to young professionals in city centres. HMOs are increasingly common as a buy-to-let investment for a few reasons.</p><p>Because the property is let to a number of different tenants, if one tenant falls behind on their rent, the landlord is usually still able to cover their mortgage payments from the rental income from the other tenants. </p><p>Letting to multiple tenants on different tenancy agreements also means that landlords can generate higher rental incomes.  </p><p>More and more local councils are currently introducing selective and additional licensing schemes, which can require all landlords in a given area to obtain a licence or face criminal charges. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>How much tax would you have to pay on a home or buy-to-let?</p><p>*Transactions under &pound;40,000 do not require a tax return to be filed with HMRC and are not subject to the higher rates</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 October 18, 2018
  •  MoviePass under investigation for misleading investors: Source

    MoviePass under investigation for misleading investors: Source

    ion under her authority to protect investors in companies that are publicly traded on the exchanges located in New York. </p><p> Helios and Matheson, which purchased a majority stake in MoviePass in August 2017, announced it would be lowering its price to $10 per month. Subscribers were allowed to see one standard 2D movie per calendar day at any participating theater, including major chains such as AMC and Regal. </p><p> “We are aware of the New York Attorney General's inquiry and are fully cooperating,” the company said in a statement provided to CNBC. “We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General.” </p><p> The company's stock price has collapsed in 2018. Helios and Matheson finished the day Wednesday trading at just 20 cents per share after reaching a year-to-date high of $2,442.50 on Jan. 23. The stock had dropped to half its high by mid-February and under $100 by June 5. </p><p> MoviePass began implementing various restrictions on its service earlier this year. In April, the company no longer allowed subscribers to view the same film more than once. MoviePass installed peak pricing, a surcharge for any movie deemed to be in high demand, in July. </p><p> Peak pricing was suspended the following month when the company changed its monthly subscription plan to allow for just three movies per month. </p><p> “MoviePass reserves the right to change or modify the Service or subscriptions at any time and in its sole discretion,” the company stated in its most recent terms of use, “including but not limited to applicable prices, at any time, without prior notice.” </p><p> Theater chain AMC launched its own subscription service, titled A-List, in July. Under this service, users are able to see up to three movies per week, including those in 3D and IMAX. Unlike MoviePass, A-List subscribers are able to reserve seats on the mobile app ahead of its listed showtime. </p><p> The New York attorney general’s office declined to comment.</p>

    1 October 18, 2018
  •  Asia shares sag after retreat on Wall St, weaker Japan data

    Asia shares sag after retreat on Wall St, weaker Japan data

    r an early slide. A Commerce Department report on falling new home starts hit homebuilders and retailers. Technology stocks fell after IBM reported its biggest loss in five and a half years. It sank 7.6 percent. The S&P 500 index fell 0.71 points to 2,809.21. The Dow Jones Industrial Average slumped 0.4 percent to 25,706.68. The Nasdaq composite slid 2.79 points to 7,642.70. The Russell 2000 index of smaller-company stocks skidded 0.5 percent to 1,589.60.</p><p> JAPAN TRADE: Japan recorded a trade surplus for September of 139.6 billion yen ($1.2 billion), but exports fell 1.2 percent from the previous year in the first decline for the world's third largest economy since 2016. A series of natural disasters took a toll, but the lag in exports also reflects uncertainties over trade tensions after President Donald Trump imposed penalty tariffs on billions of dollars' worth of Chinese exports.</p><p> FED TALK: The Federal Reserve's minutes from its meeting in late September, when it raised interest rates for the third time this year showed some participants thought the Fed's key interest rate would eventually need to "become modestly restrictive" to ensure inflation doesn't climb too high. Other officials felt the Fed shouldn't take that step unless there are signs the economy is overheating and inflation is rising quickly.</p><p> ENERGY: The price of U.S. crude oil slipped 7 cents to $69.78 per barrel in electronic trading on the New York Mercantile Exchange. It dropped 3 percent to $69.75 a barrel in New York, its first close below $70 a barrel in a month, after the U.S. government said energy stockpiles jumped last week. Brent crude, the international standard, lost 8 cents to $79.97 per barrel. It fell 1.7 percent to $80.05 a barrel in London.</p><p> CURRENCIES: The dollar fell to 112.52 yen from 112.66 yen. The euro fell to $1.1507 from $1.1578.</p><p> AP Markets Writer Marley Jay contributed to this report. He can be reached at http://twitter.com/MarleyJayAP</p>

    1 October 18, 2018
  • Ebay sues Amazon, claims it tried to poach its sellers

    Ebay sues Amazon, claims it tried to poach its sellers

    sion.</p><p>Ebay filed a lawsuit against Amazon Wednesday, saying the online retail giant used eBay&#8217;s messaging system to steal its sellers.</p><p>In the lawsuit, eBay said Amazon representatives signed up for eBay accounts and messaged sellers to get them to sell their goods on Amazon.com, which eBay said violated its user agreement.</p><p>According to the complaint, Amazon representatives spelled out their email addresses and asked eBay sellers to talk on the phone in order to evade detection.</p><p>Ebay called it an &#8220;orchestrated, coordinated, worldwide campaign&#8221; to &#8220;illegally lure eBay sellers to sell on Amazon.&#8221;</p><p>Seattle-based Amazon declined to comment on the lawsuit.</p><p>Both eBay and Amazon rely on independent sellers to boost their revenue, but it&#8217;s become a big part of Amazon&#8217;s growth: Last year, for the first time, more than half the items sold on Amazon were from third-party sellers.</p><p>Ebay, based in San Jose, California, said it wants Amazon to stop misusing its messaging platform and to pay it an unspecified amount.</p><p> News Corp. is a network of leading companies in the world of diversified media, news, and information services. </p>

    1 October 18, 2018

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