Car Insurance Premium Tax Rise to 6%
23/06/2010
People buying general insurance products such as car insurance, currently pay a 5% levy as part of the price. However with the Budget revealed from the Government this is set to change as of the 4th of January.
People buying general insurance products such as car insurance, currently pay a 5% levy as part of the price. However with the Budget revealed from the Government this is set to change as of the 4th of January.
The Government has set to increase this to 6%, which broken down to monitory terms means that the average car insurance buyer will now be paying £18 a year in tax on a £300 premium.
It is suspected that young drivers will amongst those hit the hardest due to their higher than average premiums.
The Insurance industry has acknowledged and expected the change; with many companies relieved as suspected it would be doubled to 10%.
Simon Douglas, director of AA Insurance, said the rise won't be welcomed by people buying home and car insurance, but is less painful than it could have been. "I am relieved that the increase wasn't any greater than that and it shows that the chancellor has been listening to our concerns.