CASH plan provider Sovereign Health Care has urged Chancellor George Osborne to make health cover more affordable by tax reforms in next week’s Autumn Statement.

The Bradford-based firm wants him to scrap the six per cent Insurance Premium Tax included in the cost of healthcare cash plans, whether funded by employers or individuals.

Sovereign also wants to see business-funded cash plans no longer treated as employee benefits. It says such moves would help make everyday health care accessible to more people.

Its call for tax reforms have been backed by Bradford South MP Gerry Sutcliffe , who visited Sovereign’s offices recently to be briefed about its concerns by chief executive Russ Piper.

The company’s cash plans pay tax-free cash back towards health expenses, such as dental fees, optical bills, prescription charges and physiotherapy costs, for treatment by the NHS or private sector.

Russ Piper, said: “Our products encourage people to manage their health proactively, by resolving minor issues before they deteriorate and demand more expensive treatment. It’s no exaggeration to say that having a cash plan can be a lifeline for many customers when it comes to affording their everyday healthcare.

“Unlike other types of insurance, our plans are designed to be used frequently. In addition, they’re community-priced: everyone pays the same, regardless of age or medical history, and premiums don’t increase if you make a claim. We therefore feel the current tax arrangements are counter-productive.

“This point was reinforced by a recent survey we commissioned of 1,000 nationally-representative consumers, in which the most often cited reason for not having cash plans was their perceived unaffordability.”

Mr Piper said removing IPT for cash plans would also align them more closely with types of insurance that are already exempt, including life assurance, permanent health insurance and other schemes such as dental plans.

He added: “In reality, we pass on a comparatively low amount of IPT to HM Revenue & Customs, yet have to fund the relatively high administration costs of collection.”

Mr Piper said the tax regime also hindered uptake of employer-paid cash plans, by treating them as a benefit in kind for employees, requiring the completion of P11D forms.

He said: “Employers widely regard the expense and time involved in administering the P11D requirements as unrealistic for low cost benefits such as cash plans.

“This is often stated by prospective firms as a reason for not funding cash plans for employees to help support their health and wellbeing.”