Bupa Insurance chief executive Alex Perry has called for tax breaks for private medical insurance (PMI), arguing that the industry is “extremely heavily taxed” and that the tax regime is limiting demand among employers.
Responding to a question from Health & Protection at the Association of British Insurers (ABI) annual conference on whether he believed tax breaks should be offered for health insurance, Perry (pictured) likened the current tax treatment of private medical insurance to that of whiskey.
“Health insurance is extremely heavily taxed, especially through businesses,” Perry told delegates.
“Five out of six people we cover are paid for by employers and for a basic rate tax payer once you add up National Insurance, Benefit in Kind, Insurance Premium Tax, the tax on health insurance premium is 50%.
“So, on every £100 customers are paying on premium there’s £50 of tax. I don’t know any other thing, apart from maybe whiskey, that is taxed so heavily and I wouldn’t put us in that category.”
And Perry revealed that Bupa’s business customers have told the provider that if PMI was more affordable, they would cover more of their employees.
“A lot of businesses already do. It’s an increasing trend,” Perry continued.
“I think employers see it now as a duty of care towards their people. I think they also see the economic benefit for them in terms of making sure their colleagues don’t go off sick and if they do go sick, they can return to work quickly.
“It’s basic economics that the higher cost caused by tax is limiting demand and I do believe a tax cut would help there,” Perry concluded.
The call follows that from Axa Health which submitted a response to the Budget consultation calling for tax breaks for workplace PMI to be included in the Budget next month.