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insurethebox calls Insurance Premium Tax illogical amid HMRC review

insurethebox calls Insurance Premium Tax illogical amid HMRC review | Insurance Business

insurethebox calls Insurance Premium Tax illogical amid HMRC review

Earlier this month HM Revenue & Customs (HMRC) launched an open consultation into how the Insurance Premium Tax (IPT) operates. While HMRC’s review does not cover current IPT rates and exemptions, insurethebox sees it as “the perfect opportunity” to delve into the levy’s relevance for telematics car insurance.

“IPT does not distinguish between traditional motor insurance and telematics insurance, even though telematics insurance has saved millions of pounds in costs related to road collisions – and more importantly saved lives,” stated Simon Rewell, road safety manager at the pioneering telematics brand.

“By reducing IPT on telematics insurance to 0%, the Government will empower young people to take to the roads, improve road safety, and increase its own revenue. It is a win-win situation and to ignore the proven statistics is illogical while also limiting social mobility for young people.”

Read more: Insurance industry reacts to IPT consultation

Citing data from the British Insurance Brokers’ Association, insurethebox noted the unsustainable rise in the tax paid for by young motorists. A £1,250 policy who will have seen a surge in IPT from £75 to £150 from 2015 to 2017.  

“Telematics has been proven to not only save lives, but save money both for young motorists and for the government through a reduction in pressure on emergency services,” asserted Rewell. “Removing IPT from this form of insurance therefore makes complete sense.”

Closing on July 17, HMRC’s call for evidence centres on examining the administration and collection of IPT as well as the existence of unfair tax outcomes.