The Queen’s Speech takes place on 18 May 2016. A number of recent Parliamentary briefing papers have covered topics likely to be the subject of Bills that might be announced by Her Majesty. Debate on the Speech will take precedence in both Houses for several days after 18 May. A key point of interest for general insurers will be whether the Speech refers to legislation to implement reforms to injury claims announced in the 2015 Autumn Statement.
One week on from dramatic announcements by the Chancellor of changes to the small claims track limit and of removing entitlement to general damages in low value soft tissue claims, is any of the detail around these proposals any clearer? Do we know more now about how and when the Government is going to act and what the impact of the measures will be?
Two points in the Chancellor’s summer budget would probably have come as a surprise to those involved in insurance business.
The increase in premium tax from 6% to 9.5% for polices written after 1 November 2015 will hardly have been welcomed. The Treasury expects this to raise half a billion pounds in the 2015/16 financial year and around one and a half billion pounds annually in future years. The lead-time was really quite limited, with 1 November less than four months after the Chancellor’s budget speech in early July. We might have expected an April 2016 implementation of this new tax rule, given that Government reforms tend to attach on either 6 April or 1 October of each year (these being known as “common commencement dates”). One very plausible explanation for the adoption of a 1 November for the higher IPT rate is that it will allow the Treasury to collect higher rate of IPT on the vast numbers of policies renewing on 1 January and on 1 April 2016.