Increase in Insurance Premium Tax

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Association of British Insurers (ABI) response on the increase in Insurance Premium Tax and cuts to corporation tax

 

 Huw Evans

Huw Evans, Director General of the Association of British Insurers (ABI), responds to the increase in Insurance Premium Tax and cuts to corporation tax announced in the 2015 Summer Budget.

On the increase in Insurance Premium Tax, Huw Evans said:

“Insurance Premium Tax is a tax on people and businesses at the point at which they buy a general insurance product. So it’s very disappointing to see a more than 50% tax increase being imposed on consumers, especially when the insurance industry and Government has worked so hard in recent years to bring down the cost of essential insurance.”

The ABI calculates that the new rate of IPT will add £9.48 to the average annual household insurance policy (buildings and contents combined) and £12.25 to the average annual comprehensive motor policy.

On Corporation Tax, Huw Evans said:

“Further cuts to corporation tax are good news. They will continue to make the UK a highly competitive destination for insurers and savings providers and enhance London’s position as the insurance capital of the world.”

 

Derek Rigby

Derek Rigby of Sagar Insurances said:

Sagar Insurances logo

The increase in IPT has been roundly criticised by Business and the General public alike. Our initial thought was in a similar vein. However if the increase means that Insurance buyers review more closely their Insurance spend and work with a Professional Insurance Broker who will not only provide superior service but competitive pricing then all is not lost.
For instance at Sagar Insurances despite a huge increase in  on line competition the retention rate for our Personal Lines team is constantly around the 95% mark. This would tend to support our view that for many consumers price is not the overall factor when looking at their Insurance renewal. Excellent service and advice, superior Claims Handling must also be a consideration.

 

 

The New Whiplash – Guest Blog

Noise Induced Hearing Loss – The New Whiplash

Sagar Insurances logo

30 Willow Street, Accrington BB5 1LU
01254 391411

by: Derek Rigby  of Sagar Insurances

Derek Rigby

According to the Health and Safety Executive (HSE), 17,000 people in the UK suffer deafness, ringing in the ears or other conditions caused by excessive noise at work.

At the same time, claims against insurance policies have been rocketing. For example AXA Business Insurance saw a year-on-year rise of 75% in the number of deafness claims in 2012 – a rise of 162% between 2009 and 2012.

Deafness claims do not have the same restrictions on costs that a road traffic accident claim might. For example, success fees can be as high as 100 per cent and hourly rates rather than fixed costs can be claimed. This will make a significant difference to the costs recovered by a successful claimant’s solicitor.

Hearing Loss

With the costs solicitors are able to claim from Motor Personal injury reducing due to recent government action Hearing Loss is being referred to as “The new Whiplash”

East Lancashire’s rich industrial heritage inevitably left significant numbers of people with hearing problems. Those affected by noise levels, for example, from rattling looms in Lancashire’s traditional mills should rightly be compensated if the employee breached Noise regulations.

However many of the claims we as Brokers receive are spurious and in some cases fraudulent and it is these that Insurance Industry is keen to defend.

The claim is usually structured as follows:

Potential Claim:

Solicitor requests Personnel and Occupational Health records from employer. There is no claim at this stage the claimant solicitors are merely “fishing”. However they are entitled to the information under the Disease and Illness Protocol. The employer has 40 days to respond.

At this point it is always advisable to start the process of identifying the appropriate Insurer even though it is the Employers responsibility to send the documents not the Insurer.

If a letter of claim follows this needs to be acknowledged within 21 days. This is the point where Insurers must be advised. Due to the length of the claimant’s employment then a number of Insurers will need to be notified. The last Insurer on Risk will coordinate the claim under the Disease and Working Party Agreement (DWPA).

Some of the questions our clients ask are as follows;

Q – How far back can someone claim for deafness/ accident?
A – This is primarily subject to the limitation period, which is of course not more than 3 years from the date of accident/injury or 3 years from the claimant’s date of knowledge, if later.  This is also of course subject to proof of negligence, which in terms of Noise Induced Hearing Loss Claims is commonly regarded as only arising with the publication of Noise & the Worker in 1963.
Q – Where there was a legal requirement to keep the ELI’s for a specified timescale and that timescale has since elapsed where does this leave the employer? Are they totally responsible for any compensation claim?

A – An employer is totally liable for any damages where a worker proves injury caused by the employer’s fault during any period for which there is either no insurance or insurance has not been identified.
Q – If the employer doesn’t have records of their insurance from the past is there any way of finding out who their insurer would have been during the time of the incident.
A – Yes, by searches at the Employers Liability Tracing Office.  If that does not help, the instruction of an insurance archaeologist is an option, but this is expensive. It is also helpful to contact Accountants or previous Broker that the Employer may have used who may have had copy Insurance documents from the financial perspective.

We have recently identified an Insurer for a client following our advice that they should contact their former accountants. They were able to supply Insurance certificate’s going back to the 1980’s which was exactly the period needed.

Following the receipt of a claim for Mesothelioma we persuaded a client that it would be in their interests to pay staff to work at weekends searching their archives for policies from the 1970’s. Following a successful search an Insurer was identified. The claim was eventually settled at £160,000. Our client would have been responsible for all these costs had an Insurer not been identified.
Q – What happens if the company has no record of their employment, would the employee have to prove that they were employed by the company?
A – Yes, but normally the employment history issued by HM Revenue & Customs will establish this for the period from 1961/62.  Prior to 1961/62, the claimant’s own evidence that he was employed is usually sufficient, particularly if a company has no remaining employment records.

If you have an Insurance Broker they should be able to assist with all the various aspects of the claim.

Tactically they should be able to assist you in responding to the letter of claim as this should provide specific information related to their client and his employment. The failure to provide this information can afford the employer valuable time in researching their archives.
Indeed in many cases once we have interrogated the initial letter of claim and responded the claimant solicitor closes the file and does not pursue further.
We also have the support of BLM Solicitors a major defendant law firm

What can Employers do to avoid future claims while dealing with Historic claims from the past?

  •  Keep a generic file with all relevant noise surveys, risk assessments, safety meetings going back as far as possible
  • Assess the risks to your employees from noise at work and take action to reduce exposure
  • Provide employees with hearing protection if you cannot reduce the noise exposure by using other methods
  • Make sure the legal limits on noise exposure are not exceeded
  • Provide your employees with information, instruction and training
  • Carry out health surveillance where there is a risk to health

Sagar Insurances logo

30 Willow Street, Accrington BB5 1LU
01254 391411

 

 

 

 

HMRC Investigations now yielding £18 x £1 invested

HMRC tax investigations into individuals and SMEs are now yielding £18 for every £1 invested

From:       Andrew Stephenson

Catch the blog below from PfP

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HMRC has boosted returns from its investment into tax investigations carried out by local compliance teams, which focus on individual taxpayers and small businesses. For every £1 spent by local compliance teams in 2013/14, £18 was collected in additional tax. This is up from £16 per £1 invested during the previous year.

In total, £8.9 billion in extra tax was collected via local compliance investigations in 2013/14, up from £7.8 billion in 2012/13.

This high return on investment means that HMRC is likely to continue to pour resources into tax investigations undertaken by these teams. A growing number of ‘everyday’ taxpayers, including more SMEs, are likely to find themselves under scrutiny as a result.

This increased efficiency serves as a reminder that HMRC is broadening its range of targets. As accountants frequently tell us, HMRC is no longer focusing solely on high net worth individuals with money held offshore or traditional cash businesses. The attempt to increase revenue has led to a greater focus on ordinary taxpayers.

Most accountants will be aware that HMRC has launched a range of campaigns in recent years targeting everyday taxpayers. The ‘Second Incomes Campaign’, for instance, means  that private tutors and even online traders are amongst those under more intense scrutiny. Voluntary disclosure schemes have also been launched to target specific job sectors, with solicitors being one of the most recent targets.

The 31st January filing deadline typically triggers a wave of new tax investigations. HMRC’s increased efficiency means that taxpayers should be ever more diligent when completing self-assessment tax returns.

The new aggressive approach adopted by HMRC means it is much more likely that clients may end up on the receiving end of a tax investigation.