No further Insurance Premium Tax increase in Budget

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Insurance Premium Tax (IPT) will go up from 10% to 12% in June, as previously announced by the Government, but no further increases were announced in Wednesday's Budget.

The decision breaks the trend of successive hikes, City AM reported.

Earlier this week, an RAC Opinion Panel survey found that motorists across the country were worried the Spring Budget would result in IPT increasing earlier than the expected rise in June.

IPT, which impacts the cost of all new insurance policies from car insurance to pet insurance, has already grown from 6% to 10% in the last two years. In last year's Autumn Budget, Chancellor Philip Hammond announced that a further rise would come into effect on 1 June.

The RAC's survey found that four in 10 motorists thought IPT would rise again in the Spring Budget, while 31% of the 1,608 people questioned said it was the most concerning of the motoring-related taxes. Fuel duty was the second most concerning.

RAC insurance director, Mark Godfrey, said: "Fuel duty has traditionally been the motoring tax drivers have been most concerned about, but years of campaigning appear to have helped ease that burden with the rate having been frozen at 57.95p a litre since 2011.

"Sadly, Insurance Premium Tax now seems to be the big focus for the Government which is clearly why motorists are saying they are so worried about it."

Young drivers will be particularly affected by any increase in IPT.

"While it is understandable that young drivers have to pay the highest premiums as they present the greatest insurance risk, the rises in IPT have only served to make those premiums even higher and less affordable," Godfrey added.

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