Campaigners push for updates to ‘regressive’ car tax which targets young drivers

Campaigners push for updates to ‘regressive’ car tax which targets young drivers

Car tax changes could be introduced as soon as April 6 if new Chancellor Rishi Sunk changes the rules in the Budget in MarchHe is expected to rubber-stamp updates for benefit-in-kind savings which will see electric car prices fall for car buyers.

This compared to an average of £77 for the rest of the UK confirming younger motorists are disproportionately affected by the charge.

Dan Hutson, Head of Motor Insurance at Compare the Market said: “There is uncertainty over the time of a budget under the new Chancellor and rumoured clampdown on IPT loopholes.

“The Government has to explore exemption to this tax for young people to help them stay on the road and make the system fair.

“It is clearly unfair that young people, who can afford it least, shoulder the largest burden when it comes to insurance premium tax.”

Speaking to, CEO of Admiral Group, David Stevens called the charge a “uniquely regressive tax” which was hitting those who can least afford it.

Mr Stevens said: “The Insurance Premium Tax rate currently stands at 12 percent, less than five years ago it was six percent , we sincerely hope the Government has no plans to raise it further in the upcoming Budget.”

He said the charge made it more difficult for young people to get onto the road which could be crucial to get to work.

He added: “We agree with the ABI and encourage the Chancellor to not only freeze the IPT rate, but to go further and cut it.

“Better still, why not consider a much fairer system; a flat-rate tax, so all motorists pay the same amount regardless of the annual premium?”

The Association of British Insurers has also rallied behind the campaign to change how IPT rates work.

The Head of General Insurance Policy at the group said reducing the IRT burden was an “obvious” and  “much needed” way to help motorists.

Speaking to, Head of Motor Insurance at MoneySuperMarket, Dave Merrick even claimed insurance costs could rise.

He said: “If IPT goes up then insurance premiums are likely to increase, so there may be an added cost for many drivers renewing after April.

“There will still be good prices out there but make sure you shop around and don’t just auto-renew.”

Published at Tue, 03 Mar 2020 05:01:00 +0000