When consumers in the UK complain about insurance companies being “rip off merchants” it’s always worth pointing out that an ever growing chunk of the premium paid is TAX. Yes, it’s called Insurance Premium Tax and it’s a punishment for doing the right thing and covering your assets, healthcare, travel or car. Worth pointing out now and again – a totally regressive and unfair tax. Worth EIGHT BILLION POUNDS a year by the way.
Here’s the word;
According to this morning’s HMRC data, Insurance Premium Tax (“IPT”) receipts stood at £1.3 billion in February 2025, bringing the 11-month total for the 2024/25 financial year to £8.8 billion.
In the full 2023/24 financial year, IPT raised £8.1 billion so the tax has already registered a record annual haul with one month of receipts still to be counted.
Cara Spinks, Head of Life & Health at leading financial services consultancy Broadstone, said: “The latest IPT receipts confirm that 2024/25 will be yet another record IPT haul for the Chancellor – and break the previous record by some distance.
“Demand from consumers in the independent healthcare market has continued to increase in recent months. Rising economic inactivity due to long-term illness and NHS waiting lists has seen individuals and employers increasingly turn to the insurance sector to provide health and wellbeing support, which in turn has increased premium income and tax receipts.
“This shift towards the independent sector has been an important part of alleviating some pressure on public health services. Health insurance products, such as private medical insurance and health cash plans, offer access to vital preventative and supportive treatments.
“We continue to encourage the government to consider removing IPT from health insurance products. Doing so would align with its mission to boost productivity and economic activity, while also supporting broader goals of reducing NHS waiting lists, maintaining a healthy workforce, and driving long-term economic growth.”
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