Tax On Premiums Goes Up

Posted on November 2, 2015 by WebTeam

Some motorists may not have been aware that their car insurance premiums could have gone up yesterday (1st November 2015). This is due to the increase in Insurance Premium Tax announced by the Chancellor of the Exchequer in the last budget.

The Chancellor of the Exchequer, George Osborne, announced in the most recent budget that Insurance Premium Tax was rising to 9.5% thus increasing the cost of most car insurance policies

George Osborne announced an increase in Insurance Premium Tax in the last budget.

Insurance Premium Tax was previously set at 6% and is payable on most car insurance premiums as well as some other types of insurance. However, with effect from the 1st November 2015, this % was increased significantly to 9.5%.

It affects those motorists who are renewing their car insurance policy on or after the above date or any new policies that are taken out from the 1st November 2015. This is not good news for the motorist who could well do without having to spend more money on keeping their vehicles on the road.

The impact of this rise means that the average premium on a fully comprehensive car insurance policy will go up by around £13 per month. However, it is the young driver who is likely to suffer the most financially with the average premium for a 22-year-old going up by about £42 per annum – a sizeable sum.

Unfortunately, premiums have been on the increase of late as a result of other factors so what can you do to try to mitigate rises in car insurance premiums?

Well, not enough people look around for competitive cover with too many just accepting the first quote that they get and not comparing it with other quotes from different companies. There are dozens of car insurance providers in the UK all looking to take on new business. Therefore, it could be in your best interest to check what as many of them as possible are charging for the level of cover you require.

One way of doing this could be to obtain quotes through one or more price comparison websites. Such websites often have dozens of car insurance companies on their database so you can quickly look at a number of quotes and compare the cost. Do bear in mind that not all insurance companies use a price comparison website with some only dealing direct with the customer so you may wish to broaden your search and get quotes from one or more of them.