IPT rise flies ‘in the face of Road Safety vision’
Chancellor George Osborne has been urged to remove IPT for Usage Based Insurance in his Spring Budget.
Paul Stacy, founding director of Wunelli, a LexisNexis company said, ‘The IPT increase implemented in November 2015 was the Chancellor’s biggest revenue raiser in last year’s Summer Budget and there are concerns that IPT may rise again in the Spring Budget of 2016.
‘We agree with the ABI position that this penalises those that have taken out insurance and are trying to do the right thing. However, there is also a bigger societal issue at stake with regard to road safety and young drivers and we would urge the government not to pass up the opportunity again to make IPT exempt on telematics based insurance policies.
‘Driving a car is probably the most dangerous thing most people are ever likely to do and the risk increases considerably in young drivers for a variety of factors.
‘We know, through our work with insurers that drivers with a telematics insurance policy are 20 per cent less likely to have a car crash than those with standard insurance. The government itself has acknowledged in its British Road Safety Statement that telematics-related insurance policies that monitor and financially reward safe driving behaviour through lower premiums offer a potential blueprint for new targeted casualty reduction initiatives.
‘Yet, young drivers are being hit the hardest by last year’s IPT increase given they are already paying higher premiums. The concern is that a further rise could encourage an increase in fronting and uninsured driving while doing nothing to support road safety. It would appear to fly in the face of the Government’s Road Safety vision. We would therefore urge the Chancellor to consider how the societal benefits of making telematics policies exempt from IPT would far out-weigh the loss in tax revenues.’