THIS TORY TAX WON'T WASH; How to beat sneaky cover charge.

The Tories have dropped a pounds 160 million tax bombshell on High Street shoppers.

Last week a 17.5 per cent tax was slapped on insurance cover sold with electrical goods.

The Premium Insurance Tax was sneaked into the small print of last November's Budget.

And it could push up the cost of a five-year warranty for a washer-dryer by pounds 40 to more than pounds 270.

We spend pounds 400 million a year on insurance cover for items such as TVs and washing machines. But these warranties have been slated by the Consumers' Association as "overpriced and overrated".

That's because stores make small profits on goods like washing machines and make up their money from selling extended warranties.

For instance, it can cost pounds 300 to cover a washer-drier for five years. Yet almost seven in ten will run for five years without breaking down. Even then, the average repair bill for a washer-drier is just over pounds 50 a time.

The good news is that the tax will not be imposed on policies bought direct from insurers. They work out at around half the cost of buying cover from stores.

For instance, Norwich Union Direct charges pounds 6.99 a month for its Ultimate Appliance Breakdown Cover against breakdown for nine household items less than five years old.

Insuring items up to eight years old costs pounds 8.99 a month. Details on 0800 888 777.

TSB's Appliance Repair Insurance costs a minimum pounds 5 a month and covers appliances up to seven years old. Customers call a helpline and the insurer arranges for an engineer to call. The policy covers the cost of call-out charges, parts and labour. Details at TSB branches.

Domestic & General's Multi Appliance Policy charges a monthly fee for each item you insure. There is no age limit and it covers accidental damage. Details: 0181 946 7777.

Sun Alliance Connections will also insure each household item separately. Premiums range from pounds 1.50 a month for a fridge to pounds 7 a month for a washer dryer.

But the policy will not replace items that are beyond repair. Instead you'll receive part of the cost of their replacement. Details on 01473 291 010.

Don't be pressured into buying warranties from shops. All-in policies bought direct from insurers can be good value if you have a lot of electrical goods.

You don't need insurance for the first year - goods are protected by the manufacturer's guarantee.

Breakdown cover is NOT a replacement for contents insurance. Accidental damage, fire and theft are not included.

Personal computers are not included in these policies.