The Labour party have confirmed that they would add to the UK’s ‘fastest growing stealth tax’ by increasing Insurance Premium Tax on health insurances to 20%.
A Labour government would use the additional income from increasing IPT to fund free car parking at NHS hospitals.
“Labour will end hospital parking charges, which place an unfair and unnecessary burden on families, patients and NHS staff,” Jeremy Corbyn, Leader of the Labour Party declared adding “Hospital parking charges are a tax on serious illnesses.”
Although an admirable and welcome stance the new pledge will likely be unpopular with UK businesses and those individuals who have health insurance. The majority of health insurance policies are provided by UK employers who have faced a series of increases over the years, the most recent due to come into effect on 1 June 2017.
A spokesperson from the Association of British Insurers criticised the move. “Private medical insurance and cash plans cover around four million people in the UK from all walks of life. People who are treated privately through medical insurance free up room for others to access treatment earlier, helping to cut waiting times and reduce pressures on the NHS.
AMII, a Trade Association promoting best practice within the protection industry, believes that HM Treasury has viewed Insurance Premium Tax (IPT) as “low hanging fruit” for generating revenue with three increases in the last two years and has lobbied Government over recent tax rises.
Commenting on the previous proposed increase to 12% that comes into effect on 1st June, and the likely impact on the NHS, the AMII Chairman, Stuart Scullion said: “Increases in IPT affect the NHS as much as the Private Health sector. With the taxman taking an additional £120 in IPT for every £1,000 premium charged it is no wonder some buyers of health insurance and health cash plans are saying “enough is enough”, cancelling their PMI and relying on an already overstretched NHS.
Stuart has previously described the rises in IPT as the ‘UK’s fasted growing stealth tax’.
Linked news stories we are covered on increases to IPT