There have been fresh calls for the UK government to consider scrapping or reducing the Insurance Premium Tax (IPT) on car insurance for electric vehicles (EVs)

Paul Baxter, CEO of The Green Insurer, is calling for the removal or reduction of IPT on electric vehicles as a practical step to encourage wider adoption.

Baxter highlighted research conducted by The Green Insurer, which found that 36% of motorists would be more likely to switch from petrol or diesel vehicles to EVs if the IPT were removed. 

He said: "Scrapping or reducing IPT on electric vehicles would be a straightforward way to help encourage drivers to make the switch from petrol or diesel cars."

“By getting more new electric cars on the road we are building a stock of greener used vehicles for the future. This issue is just too big to be caught up in party politics. Whatever fiscal issues the government faces, scrimping on the environment is just something that we cannot afford,” Baxter said.

The Insurance Premium Tax is a government levy applied to all general insurance premiums.

Over the past decade, the IPT rate has doubled from 6% to 12%, generating £8.15 billion for the Government in the last financial year, it has emerged.

Labour’s commitment to reinstating a ban on the sale of new petrol and diesel cars by 2030 underscores the urgency of making EVs a more affordable option, Baxter said.

Speaking previously, a Labour Party government spokesperson said: "We’re committed to delivering greener transport by supporting the transition to electric vehicles."

The survey highlighted concerns among motorists regarding the financial impact of switching to electric vehicles (EVs).

Recommended reading:

Mandatory driver retraining calls as DVLA figures revealed

Calls to raise tax on petrol and diesel cars in the UK

Drivers want tougher sentences to tackle drink-driving

60% of respondents cited the higher upfront cost of EVs compared to petrol or diesel models as a key reason for not considering an electric or hybrid vehicle for their next purchase.

The spokesperson added: "We will provide certainty to manufacturers by restoring the 2030 phase-out date for new petrol and diesel cars, and are committed to accelerating the rollout of electric vehicle charging infrastructure.

"We will set out further details in due course."