Stores to be hit by insurance tax change
Electrical good retailers could be hit by the Chancellor’s move to close an Insurance Premium Tax loophole which allowed companies to avoid charging VAT on insurance sold as a package with goods and services. Peter Jackson, national VAT partner at Ernst & Young, said: ‘This could be an issue for companies like Thorn, Granada and Currys, who are selling warranties with goods.’ The Chancellor also raised IPT from 2.5% to 4%, which will hit general insurance products but not the longer term pensions and life insurance.
