Insurance Premium Tax hike hits again
Insurance Premium Tax (IPT) increased to 10 per cent on Saturday and like any tax, it’s not good news for UK bikers.
Last November, IPT jumped by 6.5 per cent and while the latest rise isn’t as dramatic, it will still see bikers pay more for their insurance and comes within 12 months of the last jump.
According to the Association of British Insurers (ABI), the latest hike in IPT will see motorists pay on average £2 per year more for their vehicle’s insurance policy.
But for young people, who typically pay more for their bike insurance, the rise will be even more dramatic.
On Saturday the RAC revealed that young drivers in the UK would see average car insurance policies rise from £1,500 to £1,650 in light of the new IPT cost.
And while young bikers aren’t likely to see quite so dramatic a jump, their motorcycle insurance policy is only going one way.
Who else will be hit by IPT growth?
Every motorist in the UK will be hit by the rise in IPT however it is those who already pay more for their motorcycle insurance that will feel it the most.
IPT is paid on a policy-by-policy basis and is charged to insurers who then pass the cost on to its customers.
So if you live in a postcode with a high rate of vehicle theft, you’re going to pay more for your motorbike insurance. As IPT is a percentage of the cost of your insurance, you’ll end up spending more money on IPT too.
Why has IPT increased again?
As revealed by George Osborne in his final Budget, IPT has grown for the second time within 12 months to generate money for flood defences in Yorkshire and Cumbria.
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