A surprise tax change by the UK Government has riled British insurance brokers.

The British Insurance Brokers’ Association (BIBA) is alerting its members that insurance premium tax now has to be applied to fees charged under a separate contract for personal lines insurance.

The Government’s pre-budget report last week said the move closes a loophole, but BIBA Chief Executive Eric Galbraith describes it as “a further cost to consumers and a huge cost to many members”.

“Expecting brokers to change processes and systems without allowing any timescale to introduce these is absurd,” he said.