Medicash has hit back at claims by the Chancellor George Osborne that his hike in insurance premium tax (IPT) on healthcare insurances only brings the UK into line with Europe.

In fact out of 29 EU countries twelve exempt healthcare of IPT and a further three don’t apply it at all. Only six have IPT on healthcare above 6%: Belgium (9.25%), France (9%), Greece (10%), Slovenia (6.5%), Slovakia (9.5%) and the UK (9.5%).

Sue Weir, chief executive of Medicash said: “Businesses in the UK need to realise that this tax puts them at a disadvantage in terms of growth and profits and the health and wellbeing of their employees if they are unable to cover the rise in providing health insurance for those employees.

“By putting the UK at a tax disadvantage to Europe the high level of IPT will impact negatively on UK business productivity and both the physical and mental health of our employees.”

Premium tax price hike infographic