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Insurance should be less taxing for charities
Nine out of 10 people would like George Osborne to reduce Insurance Premium Tax (IPT) for charities in tomorrow’s Autumn Statement, according to Make It Cheaper Financial Services.
Everyone pays IPT - a form of Value Added Tax collected by the Treasury - when buying insurance products, a premium which normally adds 6% to the cost of a policy.
Make It Cheaper asked 515 people what they considered to be a fair IPT rate for charities to have to pay. Over 90% thought charities should be eligible for a discount with over half (57%) saying they should be entitled to full exemption.
Make It Cheaper suggests any reduction in IPT for charities should be applied by default to policies, rather than putting the burden on treasurers to apply for a discount. This is based on the widespread failure of charities to apply for VAT discounts on their energy bills that entitle them to a reduction from 20% to 5% - but only once a declaration form has been filled out and sent to their energy supplier.
Research conducted by Make It Cheaper among 656 small charity treasurers earlier this year revealed:
- 37% of treasurers didn’t know a reduced rate of VAT applies to charity energy bills.
- 58% didn’t know the onus is on the charity to apply for the discounts by signing a declaration form and sending it to their energy supplier.
- 74% didn’t know that rebates for overpayments can be claimed as far back as 2009.
Kylie Lane, Head of Insurance at Make It Cheaper Financial Services, commented:
"The finances of most charities are looked after by part-time volunteer treasurers who all too often simply aren’t aware of the various discounts available to them. Their charity status should be enough to entitle them to tax breaks without having to dig around in a haystack of Red Tape. If IPT can be waived for spaceships*, it can surely be waived for charities."
About Make It Cheaper:
Based in Central London with 150 staff, Make It Cheaper has been the No.1 destination for businesses to get a better deal on their utilities since it launched in 2007. Following its acquisition of Ofgem Confidence Code-accredited www.UKPower.co.uk in 2012, Make It Cheaper also provides competitive energy prices and free expert advice for households – online and over the phone. Its supplier panel includes all of the Big 6 and 26 of the UK’s smaller domestic and non-domestic energy companies. For businesses and charities it also offers savings across other overheads including: telecoms, insurance and merchant services. The company has appeared in the Fast Track 100 for the past three years and has won the title of ‘Consumer Champion’ at the Energy Live Consultancy Awards for the past two years. Its ‘Net Promoter Score’, based on 684 customer satisfaction questionnaires completed since September 2014, is +69.
Further information: Nick Heath 020 7654 0730 / 07720 297972 / email@example.com