Motoring organisation the AA has criticised the chancellor’s decision to increase Insurance Premium Tax (IPT), claiming the move could lead to more uninsured drivers in the years ahead.

Announced in the chancellor’s summer Budget, IPT will now rise from six per cent to 9.5 per cent in the UK, with the result being that the average car insurance premium for UK motorists will now increase from £530 by a further £17.50.

This may not seem like a huge sum in of itself, but the move means UK road users are effectively now paying millions of pounds more in tax every year simply for the privilege of owning a road-legal vehicle.

AA president Edmund King commented: “Whilst fuel duty has been frozen, every driver will be hit with the increase in Insurance Premium Tax. This is an outrageous hike which could well backfire by leading to an increase in uninsured drivers.

“Simply piling on IPT tax could backfire on the government.”

Mr King added that the government’s decision to amend the banding of Vehicle Excise Duty for new cars cannot be commented upon until full details of how these changes will take effect are announced, although the dual announcement that a new Road Fund is to be set up has been supported by the AA.

Overall, Mr King argued that motorists appear to have been hit hard in the latest summer Budget, but only time will tell regarding the full impact of these changes.

——————————————————————————————————–

Here at The Fuelcard People we  understand how important it is for fleet and HR managers to be able to check that their grey fleet drivers have the correct insurance when they are driving for work. This is why we have introduced Completecare, to help you meet all your duty of care responsibilities.