Westfield Health absorb insurance premium tax

Wednesday, September 1, 2010

According to news reports, the medical insurance firm Westfield Health have announced that they will be taking an unusual step in order to safeguard their existing and new customers from inflation through Insurance Premium Tax (IPT). The firm have decided that, rather than increasing the premiums for their private medical insurance products, they will instead absorb the one percent IPT which was announced in January this year.

The announced absorption will create a cost to Westfield Health of over five hundred thousand pounds per year. Despite the impact which the IPT increase may have on UK customers of insurance products, the company are the first firm to make the move to covering the shortfall, themselves.

The chief executive of Westfield Health, Jill Davies, has commented on the move to cover the tax increase within the UK for their customers: “The Insurance Premium Tax increase is unwelcome for customers. We want to reassure all of our customers, whether companies or individuals, that it will not be increasing prices immediately on implementation. However, in future reviews of plans, we will have to build any increase in the prevailing rate of IPT in our premium calculations."

"Although it was disappointing to hear of the 1% IPT increase from 5% to 6%, some areas of the insurance industry breathed a sigh of relief as there had been fears that the increase could be much greater. Westfield intends to lobby the Government to ensure they are aware of our concerns about any future possible IPT increases. It does not seem to make any sense to use IPT to raise taxes as this penalises the vast majority of people who are buying a healthcare plan to protect themselves and their families."

Despite the new IPT rate, the UK will remain the lowest country in Europe when it comes to paying tax in this area.