The government has upped insurance premium tax by 0.5% to 10% to fund further flood defences, Chancellor George Osborne announced in the Budget today.
The government has upped insurance premium tax by 0.5% to 10% to fund furtherflood defences, Chancellor George Osborne announced in the Budget today.
The premium, which is paid every time an insurance policy is purchased in the UK, was raised from 6% to 9.5% in November 2015 but has now been upped by an additional 0.5%.
The cost is likely to be passed onto general insurance premiums.
Osborne said: “To respond to the increasing extreme weather events our country is facing I am today proposing a further substantial increase in flood defences.
“That would not be affordable within existing budgets.
“So I am going to increase the standard rate of insurance premium tax by just half a percentage point – and commit all the extra money we raise to flood defence spending.
“That’s a £700m boost to our resilience and flood defences.”
Osborne said the cash will give the go ahead to schemes in York, Leeds, Calder Valley, Carlisle and across Cumbria.
