Treasury says exempting sector from insurance premium tax is 'challenging'

Jane Ellison, Financial Secretary to the Treasury, appears to pour cold water on the idea in a written answer to a question

Exempting charities from the insurance premium tax would be "challenging", the Treasury has told MPs.

At the Autumn Statement last month, the government said the rate of IPT would increase to 12 per cent in June, which would mean the rate had doubled in only 18 months. IPT is a tax on general insurance premiums, such as home, car and travel insurance, and many charities, especially those with property, are affected.

Last week, in response to a written question from the Conservative MP Fiona Bruce about whether the Treasury would assess the feasibility of exempting charities from IPT, Jane Ellison, Financial Secretary to the Treasury, said that an exemption would be difficult to implement.

Ellison said: "Charities are a vital part of our society and the government continues to support them and their donors, including through tax reliefs worth more than £5bn in 2015/16.

"The government has also made up to £42m a year available for the Listed Places of Worship Grant Scheme and, at Budget 2016, the government announced a further £20m for the First World War Centenary Cathedrals Repairs Fund.

"While all tax policy is kept under review, it would be challenging to implement an exemption for insurance purchased by any specific group."

Several organisations, including the Charity Finance Group and the Charity Tax Group, have campaigned for charities to be exempt from IPT. A petition was launched at the end of 2016 by Simon Hickman, chief executive of the insurance firm Access Insurance, to exclude charities from IPT. The petition has about 1,000 signatories so far.

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