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Abolish Insurance Premium Tax

Comment 6th July 2010

One of the main objectives of this (or indeed any)  government should be to encourage people to fend for themselves. To this end, people should be encouraged to save, to look after their own health (without descending to the levels of nannying beloved of GPs and ministers) and to make provision to protect themselves against adverse events.

In furtherence of the last of these objectives, people rightly take out insurance for instance to provide for their dependents on their death, to ensure that they have somewhere to live and other laudable objectives.

Unbelievably, Chancellors from John Major's government onwards have decided that so far from being laudable, the action of insuring yourself against loss (and thus not being dependent on the state) is on a par with smoking 20 a day and therefore must be taxed. The prsent Chancellor has actually increased the tax.

Why does this matter?

The state should make clear that it expects people to provide against adverse events and should therefore declare immediately that all taxes on insurance premiums should be abolished forthwith.

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