Budget 2016: RAC comments on Insurance Premium Tax increase

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Budget 2016: RAC comments on Insurance Premium Tax increase

RAC Insurance director Mark Godfrey said: “The Treasury is already set to raise £386m from car insurance policies as a result of increasing IPT by 3.5% to 9.5% from 1st November last year. Regardless of whether motorists should be contributing another £52m from their car insurance policies to pay for flood defences, it is unclear whether money generated from IPT will continue to be ring-fenced in this way further into the future.

“The Chancellor clearly sees IPT as a soft target, presumably as a result of getting away with raising it last summer with very little complaint from consumers or the insurance industry.

“What makes this latest IPT rise a particularly bitter pill for the insurance industry to swallow, alongside the implementation costs, is the fact that we are yet to see any of the insurance premium reductions mooted in the Chancellor’s Autumn Statement from new initiatives aimed at cutting compensation claims for soft tissue injuries in the small claims courts. In fact the cost of insurance is rising, in part due to his previous IPT rise.”

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Our dedicated line for journalists is +44 (0)1454 664 123. Please note: the press office is unable to help with individual customer enquiries - please visit the RAC contacts page for the right number to call.

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About the RAC

The RAC provides complete peace of mind to 12m UK private and business drivers, whatever their motoring needs. Its services include:

The RAC also works to support the interests of its members and UK drivers on the most important motoring issues which it identifies via the annual RAC Report on Motoring and the RAC Opinion Panel. The Report on Motoring is the longest running analysis of driver opinion in the UK having been published every year since 1989.

For more information about the RAC, visit the RAC website.

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Contact the RAC Press Office (media only)

Contact the RAC Press Office (media only)

Press contact Emails monitored during normal office hours. For public including customer queries, call 0330 159 0740 +44 (0)1454 664 123

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