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The simplest thing to say about the markets this week is ‘flat’
Insurance Premium Tax.
Today sees the rate of IPT increase to 10%, That’s not as much as in some countries but it’s significant in the way that it’s quite disproportional to some groups. For private individuals motor insurance is significantly skewed against the young and the cost of home insurance for small houses in big cities is often higher than for more expensive houses in the country.
A young driver could be paying upwards of £150 of tax as part of their premium, a major deterrent to buying insurance in the very group that needs it most. Bear in mind too that Insurers, unlike most other businesses, can’t reclaim the cost of VAT on their input costs which means we, as customers, have to cover that cost in the premiums we already pay too.
Insurance is the means by which we spread risk, share the cost of disaster for the few amongst the many, it’s a binding force for society. That’s not something that should be excessively taxed.
Even so, for your business, don’t focus on the cost of insurance, focus on making sure that you understand the risks that you face, and decide if you can carry the risk, or want to buy protection, chanigng an uncertain future cost for a cost known today. Read the policy, (no really, it matters) and check it covers what you need and doesn’t cover a host of risks you don’t face. The right cover, at a fair price still makes good business sense.
(Source: Association of British Insurers)
Foolish moment of the Week:
Not surprisingly our pick this week is ‘Big Sam’ Allardyce, who will go down in history as the shortest ever tenure in the prime job in English football and the only England manager to have a 100% record. He was recorded in a conversation with journalists that clearly shows he’s open to pushing financial boundaries, or step over them.
The best ways to avoid ever being in this situation in any business, or any sport, in life are, being honest, always having good intentions, and never letting greed get in the way of good judgement.
It is not complicated, really, it’s not.
Preparing for the Future You Don’t Yet Know
Stephen Harvard Davis and I are running a workshop on January 19th 2017 – More details are here…
If you would like to know more call me on 07880 794127