Post UK Treasury rejects ABI call for IPT concession |
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5 October 2010 The UK Treasury has rejected a plea by the Association of British Insurers for a concessionary period when the implementation of the new insurance premium tax rate rises come into effect next year. In a letter seen by Post, MP David Gauke, Exchequer Secretary to the Treasury, told Martin Hall, chairman of the ABI indirect tax group, that "offering a concessionary period for insurers would come at a significant cost to the public finances", and that the government, "simply cannot afford to offer a concessionary period". Mr Gauke's letter, written on 27 September, was in response to correspondence sent on 27 July by Mr Hall expressing the concerns of members of the ABI, the International Underwriting Association and the Mr Gauke wrote: "I do appreciate that the decision not to offer a concessionary period for insurers may cause some of your members difficulties in processing and accounting for tax on certain policies that incept before the date of the rate rises." He added that, as with the decision to raise the rate of IPT, the decision not to offer a concessionary period had been taken in the context of an emergency budget that seeks to restore the health of the public finances and put the country "on the road to recovery". Post reported in June that insurers and brokers had been told that they would not be granted the same concessionary period as when faced with the last IPT hike in 1999 (www.postonline.co.uk/1719945). A spokesman for the ABI told Post: "We're disappointed that HM Treasury was not prepared to re-introduce transitional arrangements for the IPT increase in January 2011, as this will cause problems — and costs — for our members despite their promising words at budget. "It is disappointing that, despite these positive intentions, it appears the Treasury is in fact no more inclined to listen or take on board legitimate business concerns." Richard Asquith, Managing Director of TMF VAT & IPT Services, told Post: "Despite the hectic efforts of the broker and insurer community to persuade the Treasury to change its position on the concessionary period, its seems to have come to nil. "Clearly the government is desperate to draw in as much revenue as possible in the current crisis — whatever the impracticalities." |
