General Insurance Article - Chancellor urged to CUT IPT- and freeze Fuel Duty

 • AA calls for 2% cut in Insurance Premium Tax (IPT)
 • A 2% rise would represent 100% increase in less than two years
 • ‘Freeze fuel duty again’ AA urges

 Michael Lloyd, the AA’s director of insurance, comments: “In November 2015, the rate of IPT on car and other insurance went up from 6% to 9.5%, and then another 0.5% on 1 October 2016 – rounding IPT up to 10%.

 Another 2% would represent a doubling of this extremely unpopular form of taxation on something that drivers have no choice but to pay, while it penalises those who take responsibility for their belongings and property by insuring them.

 “There are around 1 million uninsured cars*** on Britain’s roads and that isn’t going to come down unless car insurance becomes more affordable – and that includes tax.

 “I’m calling on the Chancellor to think again and, rather, reduce the burden by 2%.

 “That would send a strong message that the Government is on the side of consumers and is keen to protect honest motorists from the serious risk imposed by uninsured driving.

 “The insurance industry has already pledged to bring down the cost of cover if the other plague on premiums: fraudulent whiplash injury claims, is also brought under control by long-overdue legislation.”

 Lloyd is also calling on the Chancellor to again freeze fuel duty.

 He points out that if duty is increased by just 1% it would add around 0.6p to the cost of a litre of fuel at current prices.

 He says: “A car typically fills up twice a month, 50 litres a go. That makes 1,200 litres a year.

 “A 1% fuel duty increase, with VAT (0.7p), would add £8.40 to the average car’s annual fuel bill, or £16.80 for a two-car family.”