Britain hikes insurance tax, targets whiplash claimsReprints
(Reuters) — Britain will raise its insurance premium tax by two percentage points to 12% from June 2017, finance minister Philip Hammond said in his budget statement on Wednesday, the third increase in less than two years.
The latest rise in the tax rate on insurance premiums represents a doubling in the rate compared with less than two years ago. The taxes are usually passed directly to policyholders.
Insurance executives have criticized the tax rises, which contributed to a sharp rise in auto insurance premiums in recent quarters.
However, the government will bring forward legislation to cut the “unacceptably high” number of whiplash claims on auto insurance policies, the finance ministry said in a statement.
“This is a classic case of the government giving with one hand, in the form of whiplash reforms, and taking with another,” insurer AXA UK said in a statement.