Insurance Premium Tax is a tax paid by insurers on all general insurance premiums. Insurance pricing is a decision which is affected by a wide range of factors, and the taxes that insurers pay are just one part of this. It is hard to predict the impact of an exemption on insurance pricing for leaseholders, as this largely depends on how the insurers would react. In addition, any loss in tax revenue would have to be balanced by a reduction in public spending, increased borrowing or increased taxation elsewhere.
While there are no current plan to introduce an exemption on insurance pricing for leaseholders, all taxes are kept under review and the views expressed to us are carefully considered as part of the annual Budget process.
The Government is working closely with lenders and the Royal Institute of Chartered Surveyors to address problems faced by homeowners caught up in EWS1 processes.