Contrary to some commentators predictions, the Chancellor did not double the current rate of IPT to 10%. Whilst Travel Insurance saw its tax rise to 20% from 17.5% – and I’m not clear as to why there is this anomaly – General Insurance which includes Private Medical Insurance, saw its tax rise to just 6% on all premiums.
This isn’t going to start a stampede to more self funding of health care, but bear in mind that the average rate of IPT in Europe is 10% so the Chancellor has plenty of room to play with later. Once we hit double figures, I think this will tip the balance towards greater self funding through health care trusts on which no IPT is currently levied.