Last week’s Budget increase of 0.5 per cent in Insurance Premium Tax is being seen as yet another blow for the farming industry.
“We are extremely disappointed as this is the second increase in IPT in less than a year and follows last July’s increase from 6 per cent to 9.5 per cent,” said Mark Roberts, managing director of the Farmers Union of Wales Insurance Services.
“It means the rate has doubled in the last five years, raising £8 billion in that time.
“We are worried that the Chancellor sees increasing the tax on insurance as an easy target and plans to bring the rate in line with VAT, because unlike VAT, IPT cannot be claimed back by the businesses we insure.
“Any further increases in IPT would be a severe blow to the responsible businesses and households that insure with us and there is a real risk that those already struggling to make ends meet will reduce their cover or stop insuring altogether,” he added.
“That is something that could ultimately prove disastrous.”
The Budget also saw announcements that farms with a corporate business structure will see a 3 per cent cut in tax, as well as a £700 million boost to help improve UK flood defences, including in rural areas.