Chancellor Philip Hammond is being called on to offer charities an exemption from Insurance Premium Tax (IPT) in his autumn budget.
The call has come from the Charity Finance Group and not for profit insurer Ecclesiastical as part of their campaign to remove charities from the tax, which is a tax on general insurance premiums and has doubled from 6% o 12% over the last three years.
“Spending on Insurance Premium Tax has substantially increased for charities in recent years, which has meant they have less money to spend on delivering charitable objectives and helping beneficiaries,” said CFG policy manager Richard Sagar.
“In keeping with the principle that money donated for public benefit should not be taxed, we would urge government to consider exempting charities from Insurance Premium Tax.”
Ecclesiastical’s charity director Angus Roy, added: “Buying insurance is an unavoidable cost for charities - either because they are legally required to, or because they are acting responsibly by putting adequate protection in place for their activities and assets.”
“The average charity is paying £300 in IPT on top of their insurance premiums. The Government has long recognised that charities should be treated differently to commercial businesses by granting reductions and exemptions from other taxes, including VAT, business rate relief and Gift Aid, so it seems unfair that IPT is an exception to that rule.
This latest call rom CFG and Ecclesiastical comes a week after the Association of British Insurers (ABI) launched a promotional push against the Insurance Premium Tax.
The ABI campaign, called #IPTsUnfair features an online film showing an Insurance Premium Tax inspector handing fines to celebrity look-a-likes who are doing responsible things, such as securing their homes or keeping their dog on a lead.
