The first major tax rise came into force last November and represented an increase of 58% in the IPT rate from 6% to 9.5% as a result of the Chancellor’s post-election Budget in July. A second hike of 0.5% was declared in George Osborne’s March Budget statement. Around 6.5 million people in the UK have who have a cash plan or private medical insurance (PMI) will be affected by the increase.
Speaking at the AMII conference ahead of an official meeting with the Treasury, Medicash chief executive Sue Weir pledged to continue to lobby the Government to make all healthcare insurance products exempt in line with life insurance, permanent health insurance and other ‘long term’ insurance products. She said: “This is a stealth tax that affects millions of people. It will place a further burden on an already hugely strained NHS and it directly contradicts all the Government’s stated commitments around the health and wellbeing of the nation.”
Fellow cash plan providers Sovereign, HSF and Paycare have joined forces with Medicash on its campaign against the rise in IPT.
Stuart Scullion, chair of AMII, said: “Medicash have spearheaded this important campaign and we welcome Sue Weir’s comments. It is vital that action is taken against what is fundamentally an unfair and ill conceived tax. We are committed to supporting Medicash in its bid to force a U-turn on this issue and will do all we can to lobby other members to join forces with us and help influence the Chancellor’s decision.”
The UK now differs significantly from its European counterparts with 12 member states exempting health insurance completely from IPT and only cash-strapped Greece applying a similar rate.
Addressing the delegation which comprised leading figures in the UK health insurance industry, Sue Weir added: “It’s a fact that healthcare cash plans have a positive impact on business productivity and absenteeism as well as the physical and mental health of workers across the country. This tax makes no sense and affects millions of individuals of all ages and backgrounds and it puts UK plc at a major disadvantage in terms of growth and profitability.”