Vision Techniques
CIWM Awards

News/Blog

Should telematics be exempt from the Insurance Premium Tax?

sunset (com)

Posted on 22nd Jan, 2020 by Charlotte Coop

This question is the central issue of a campaign that’s already gained plenty of support from significant figures, including multiple cross party MPs – as well as Brake, the UK’s leading road safety charity. Campaigners say that exempting telematics-fitted vehicles from the Insurance Premium Tax (a tax on general insurance premiums) could provide substantial savings for private drivers and commercial fleet managers alike, while encouraging those on the roads to be driving more slowly and safely.
As leading providers of a range of successful telematics products ourselves here at Vision Techniques, we’re well on board with this campaign! Let’s take a look at what it would mean for you.

What’s the reasoning behind the campaign?

As we touched on above, research demonstrates that drivers of telematics-fitted vehicles tend to drive more slowly and sensibly, which is one of the reasons so many insurance companies often demand that they’re fitted within a driver’s first year of driving. It’s also one of the reasons they’re so favoured by fleet managers of HGVs, as the size and weight of these vehicles can make them a particular danger for motorists and pedestrians alike. Partially for these reasons, campaigners believe that the widespread adoption of this technology will make our roads safer and more pleasant places to drive, and are heavily in favour of anything which will encourage its adoption. They’ve highlighted that exempting telematics from the Insurance Premium Tax (the government’s tax on general insurance premiums) will provide a big incentive, as it stands to save the average driver as much as £180 a year.

driver at wheel

Fleet managers are one of the many groups who could stand to make substantial savings with the installation of telematics (one of the reasons they’re becoming so widely adopted already), as well as making their fleets safer as a whole. Campaigners see the current application of the IPT to be outdated and irrelevant, and also suggest these changes could provide up to £200 million saving from the NHS, due to fewer incidents on the roads. Currently, the campaign is still gaining momentum, but it’ll be interesting to see where it goes in 2020!

What are the key benefits of telematics?

Whether or not telematics are ultimately exempted from the IPT, there are still plenty of reasons for fleet managers to consider investing in them. These reasons include:

  • Reducing fuel costs and increasing operational efficiency
  • More efficient planning
  • Optimisation of driving standards and monitoring of driving behaviour
  • Assisting with preventative maintenance
  • Improving safety and security
  • Increasing corporate social responsibility

We’ve gone into full details on a previous post of ours on the key benefits of telematics, but the basic principle is simple: data is power. Detailed information and analysis from telematics can help fleet managers anticipate problems, learn and develop their approaches (and routes), and keep vehicles in top condition, and check that drivers are adhering to their regulated break times and similar mandates.

lorries convoy sunset

Personally, we’re very excited to be setting a new standard in safety and vehicle performance here at Vision Techniques, with our very own range of telematics technology. If you’re considering a new vehicle and driver management solution, or you’re looking to upgrade an existing tracking system, why not give us a call on 08452 873 170 to find out how we can help?