Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • September 2016
09

AA warns Chancellor against new IPT hike

Open-access content Monday 26th September 2016 — updated 5.50pm, Wednesday 29th April 2020

The AA is urging the Chancellor not to raise insurance premium tax in his Autumn Statement in late November, saying it would lead to a spike in uninsured motoring as well as “piling more misery on drivers and householders”.

2


The country's largest motoring organisation says it is concerned that the Chancellor may see IPT as a "soft touch" and impose a second increase in under a year, by perhaps as much as an extra 2%, which would see it doubling from November 2015's rate of 6%.

Mike Lloyd, insurance director at the AA, said: "IPT has increased by 66.6% in less than a year - an extreme hike by any measure. The government wouldn't risk that kind of percentile increase on any other form of tax over such a short period of time. We have a concern that the new Chancellor may be considering a further IPT hike, perhaps as much as 2%, potentially doubling the level of tax on drivers who have no choice but to buy car insurance in order to stay legal. For some it could be the last straw and lead to a further increase in uninsured driving especially among young drivers."

The AA's warning comes just days before IPT goes up on 1 October to 10%, following the 0.5% increase announced in the last Budget, increasing the tax to 10%. Before the last rise went through in November 2015, IPT was 6%. It comes at a time when car and home insurance premiums have been rising due to continuing fraud and whiplash injury claims, rising accident repair costs and an increase in uninsured driving, according to the AA.

The 0.5% hike will add around £2.60 to the cost of a typical annual comprehensive car insurance policy costing £568.48 and is forecast to raise £80 million in 2015/16, rising to around £200m per year in subsequent years.


This article appeared in our September 2016 issue of The Actuary.
Click here to view this issue
Filed in:
09

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ