Cuts to Insurance Premium Tax proposed
Calls for a new Skills Funding Agency to promote working in the
automotive sector
“The Chancellor has the chance to give confidence to drivers now,
and for the future” says AA CEO
The AA is calling for a range of measures to help provide
confidence for drivers now, and for the future, ahead of the
Chancellor’s Budget next week (Wednesday 6 March).
A continued freeze in Fuel Duty to help keep pump prices
affordable and not fuel inflation, reducing VAT for on-street EV
charging from 20% to 5% and the reintroduction of incentives for
drivers wishing to buy an EV are just some of the policies The AA
has submitted to the Treasury.
On Vehicle Excise Duty, The AA has argued that there should be no
increase above inflation and whilst accepting the introduction of
VED for EVs after 2025, the motoring organisation believes the
rates applied to EVs should remain lower than for petrol and
diesel vehicles to act as an incentive.
One major policy that has been suggested is a cut in Insurance
Premium Tax (IPT) to help reduce the cost of insurance. The AA
has argued for Government to cut Insurance Premium Tax by 25% for
all drivers but go further for young drivers with at least a 50%
cut as the higher cost of insurances falls disproportionately on
younger drivers*.
Investment in jobs and EV infrastructure needed
The AA is also proposing a new Skills Funding Agency to help
increase the number of skilled workers within the automotive
repair sector. With the rise of electric vehicles on the market,
as well as the rise of semi and fully autonomous vehicle
technology installed in vehicles, The AA has argued that more
needs to be done to prepare the future workforce. Similarly, a
review of the existing Apprenticeship Levy is required to bring
in more flexibility to help young people access the automotive
sector.
Elsewhere, The AA is calling for more investment in publicly
available EV charging to help dispel the public’s perception that
the current number of chargepoints are too low.
Jakob Pfaudler, AA CEO, said; “The Chancellor
has the chance to give confidence to drivers now, and for the
future, in the final Budget before the General Election.
“To help households tackle the cost-of-living crisis, maintaining
the freeze in fuel duty and equalising VAT for on-street EV
charging to match domestic energy rates would be a great first
step. Similarly, help to make the cost of compulsory insurance
more affordable, especially for younger drivers, would be well
received.
“Future proofing the automotive workforce is needed too, and the
creation of a new Skills Funding Agency would help drivers in the
years to come. Investing in school and college students in this
exciting sector will help keep people on the road and instep with
vehicle technology.”
ends
NOTES TO EDITORS
* Motor Insurance Premiums
Continue to Rise as Insurers Battle Costs | ABI
