Tax hike could lead to fewer insured pets, ABI warns
"Pet insurance is not a luxury - there is no NHS for pets and owning a pet can be expensive, especially if your pet requires medical treatment."
The government is being urged not to increase the Insurance Premium Tax (IPT) in this month's Budget, due to fears it could lead to fewer pet owners getting insurance for their pets.
IPT rose from 6 per cent to 9.5 per cent in November 2015 - a move which could already have cost pet owners an extra £31 million in higher premiums, according to the Association of British Insurers (ABI).
"With only around one in four dog and one in five cat owners currently having pet cover, any further rise in the cost of insurance will not encourage more owners to insure their pet, and could risk some stopping their cover," warned ABI's policy advisor Ross Penstone-Smith.
The rise in IPT last November is expected to raise more than £8 billion in five years, ABI said in a statement. The trade association issued a plea to the chancellor not to view IPT as a 'soft touch tax' to raise revenue, as any increase puts further financial pressure on those who have done the right thing by getting insurance.
Animal charity the PDSA estimates the lifetime cost of owning a dog is £16,000-£31,000. For a cat the figure is £17,000, and for a rabbit, £9,000. But these sums do not include the cost of veterinary treatment if a pet suffers illness or injury.
Typically, the cost of treating a cat for injuries after a road traffic accident is around £875, according to ABI, while a dog with a damaged knee ligament could cost owners £1,200.
Mr Penstone-Smith added: "Pet insurance is not a luxury - there is no NHS for pets and owning a pet can be expensive, especially if your pet requires medical treatment."
FIVP has shared a survey, inviting those working in independent practice to share their views on the CMA's proposed remedies.
