Ahead of the Budget, specialist insurer Ecclesiastical has joined forces with Charity Finance Group (CFG) to urge the Chancellor to make charities exempt from paying Insurance Premium Tax (IPT).

Gloucester-based Ecclesiastical - insurer of more than 45,000 charities and not-for-profit organisations in the UK - has been working with CFG since last year to raise awareness of the impact of the continuing IPT increases on charities. Since 2015 IPT has doubled from 6 per cent to 12 per cent.

Last week, the Association of British Insurers (ABI) added its voice to the continuing debate around IPT, launching its #IPTsUNFAIR campaign aimed at convincing the Government to freeze increases for both individuals and businesses.

While Insurance Premium Tax is a tax on general insurance premiums, such as home, car and travel insurance, the vast majority of charities, especially those who own property and have significant operational costs, are also impacted.

Angus Roy, Ecclesiastical's charity director, said: "Buying insurance is an unavoidable cost for charities - either because they are legally required to, or because they are acting responsibly by putting adequate protection in place for their activities and assets.

"The average charity is paying £300 in IPT on top of their insurance premiums. The Government has long recognised that charities should be treated differently to commercial businesses by granting reductions and exemptions from other taxes, including VAT, business rate relief and Gift Aid, so it seems unfair that IPT is an exception to that rule.

"We are urging the Government to consider very carefully the negative impact that IPT is having on the work that charities do and consider granting them an exemption from this tax."

Richard Sagar, Policy Manager at CFG, said: "Spending on Insurance Premium Tax has substantially increased for charities in recent years, which has meant they have less money to spend on delivering charitable objectives and helping beneficiaries. In keeping with the principle that money donated for public benefit should not be taxed, we would urge government to consider exempting charities from Insurance Premium Tax."