Whilst Keir Starmer sips free drinks in his VIP box at Arsenal FC he can find comfort in the fact that millions of people are paying a punishment tax for doing the right thing and taking out insurance. Yep, IPT receipts just keep on rising as premiums rise, because that’s how percentages work and the government is raking it in as drivers pay over £1200 a year for a policy that cost about half of that during the pandemic.
Meanwhile over a million uninsured drivers are merrily trundling about and very little of that IPT tax seems to be spent on catching them and jailing repeat offenders. In fact, IPT receipts hit £4.42 billion through the first five months of 2024/25 according to the latest HMRC data released this morning, exceeding the same period last year (£3.92 billion) by 13%.
A total of £1.35 billion was collected through August 2024, compared to £1.16 billion in the same month in the prior year. These are sums that can pay winter fuel allowances, or build special prisons to jail TV presenters looking at abusive images online. But, as we all know, politics is about choices. Here’s some comment on IPT, which is arguably one of the most regressive taxes within the UK system;
Cara Spinks, Head of Life & Health at leading independent consultancy Broadstone, said: “With premium inflation impacting a variety of products and sectors, insurance premium tax remains a healthy source of income for the Treasury.
“Individuals purchasing health insurance products such as health cash plans and private medical insurance (PMI) are incurring this additional cost as they increasingly look to private healthcare to support their own health and wellbeing.
“However, it’s employers that are largely driving the growth in demand for these products and many are expanding coverage and access to health insurance schemes to protect the health of their employees and reduce long-term sickness.
“The recent NHS inquiry has highlighted the serious nature of the challenges facing the NHS. This, and a growing awareness of personal health risk amongst the general population, means that demand for timely and preventative complementary healthcare remains strong, despite rising claim costs.
“Affordable access to the private healthcare market, particularly to more preventative forms of treatment such as health screenings, should be a key strategy for the government to alleviate pressure on the NHS and maximise economic growth by keeping people healthy and in work.
“Reducing or removing IPT for health insurance products may not be on the list for the upcoming autumn budget, but it ought to be a serious consideration if the government wants to incentivise businesses to protect the long-term health and productivity of the workforce and safeguard already stretched NHS resources.”
https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk
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