More than seven in ten (72%) UK drivers do not know that they have to pay a tax for breakdown cover. According to the Automobile Association (AA Group
), any increase in Insurance Premium Tax in the UK budget is seen as a stealth tax.
Most attention has been focused on the hikes in IPT on motor and home insurance policies, but millions of drivers are affected as breakdown cover costs are raised.
An AA Populus survey of almost 30,000 drivers revealed the following information:
- Only 28% knew IPT applied on breakdown cover
- 71% knew IPT is levied on car and home insurance
- 87% felt more people will drive uninsured if car insurance is too expensive
- 87% felt the AA should campaign against this rise
- 87% felt premium hikes for essential insurance is unfair
- 89% didn’t agree with an increase in IPT
According to AA president Edmund King, “Almost three quarters of drivers don’t realise that breakdown cover is regarded as insurance and is taxed in this way. It is completely unreasonable that the Chancellor sees motorists as an easy target by hiking taxes for drivers who are doing the right thing to protect themselves and their families in the event of a breakdown.”