Charity, business and finance groups have joined the Association of British Insurers (ABI) in calling for the UK Government to scrap its planned increase to the insurance premium tax (IPT) in June.

Three successive rises since November 2015 will see the IPT rate double to 12% and raise more than £13 billion ($21.03 billion) for the Government over five years, the ABI says.

In a letter to the Government, the ABI describes insurance as “a basic financial safety net” for millions of people and businesses.

“IPT is a stealth tax that hits households, charities and businesses that do the right thing, and these increases have cost some families hundreds of pounds a year already,” it says.

It says the IPT affects more than 50 million policies and is a tax on productivity.

“Unlike VAT [sales tax], which most businesses can claim back, it hits insurance-dependent industries such as manufacturing, construction and exporters the hardest.”

The ABI quotes the Institute of Fiscal Studies, which recently declared the IPT rate has become “too high”.

“It is time to end this raid on the responsible,” the letter says.

It asks the Government to freeze the rate for the remainder of the current Parliament.

Signatories to the letter include ABI Director-General Huw Evans, Lloyd’s CEO Inga Beale, Automobile Association President Edmund King, British Insurance Brokers’ Association CEO Steve White, the National Chairman of the Federation of Small Businesses Mike Cherry, and Charity Finance Group CEO Caron Bradshaw, among others.