After responding to a series of parliamentary questions in January on the impact of the proposed Insurance Premium Tax (IPT) increase for charities, Financial Secretary to the Treasury Jane Ellison has now responded to a written question asking directly about whether the Government was considering setting a special rate of IPT for charitable organisations.

The Minister said:

Insurance Premium Tax (IPT) is a tax on the insurer, and there is no obligation to pass the increase on to the customer.

All tax policy is kept under review, however, it would be challenging to implement an exemption for insurance purchased by any specific group. Any such legislation would be very difficult for insurers to implement since this would require them to differentiate between customers who were buying the same type of insurance products.

Charities are a vital part of our society and the Government continues to support them and their donors, including through tax reliefs worth over £5 billion in 2015-16.

We would encourage you to complete CTG’s Insurance Premium Tax survey so we can provide data on the cost of the increase on different charities.