Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of decreasing insurance premium tax for car insurance.

IPT is a tax on general insurance premiums charged at two rates: a standard rate at 12%, including car insurance, and a higher rate at 20%. Insurance pricing is a decision which is affected by a wide range of factors, and the taxes that insurers pay are just one part of this. It is hard to predict the impact of an IPT reduction on motor insurance pricing because this depends on how insurers react. Furthermore, revenue raised from IPT helps the Government to fund vital public services, including the NHS, education and defence. The Government currently has no plans to reduce Insurance Premium Tax (IPT) on car insurance.