According to this morning’s HMRC data, Insurance Premium Tax (IPT) receipts hit £648 million in April 2025 – kicking off the start of the new tax year at a record high. Here’s some commentary on this nice money spinner from the UK Govt, which is essentially a tax on people complying with the law, or taking responsibility for their own healthcare plans.
It marks a £33 million or 5% increase from the same month last year (April 2024), which initiated a record year of receipts – totalling at £8.88 billion (2024/25),and exceeding the 2023/24 full year total of £8.15 billion by £737 million or 9%.
Receipts in April 2023 stood at £548 million – pointing to a £100 million or 18% increase in just two years.
A decade prior, IPT receipts in the first month of the financial year stood at £195 million, £453 billion or 232% fewer than this month’s level, emphasising the significant growth in IPT revenue for the Treasury.
Cara Spinks, Head of Life & Health at leading financial services consultancy Broadstone, commented: “IPT receipts for April 2025 have got the 2025/26 financial year off to a robust start, with levels already £33 million higher than the same period last year.
“After last year’s record £8.88 billion in IPT receipts, today’s data for April continues to reinforce IPT as a healthy revenue source for Treasury, thanks to continued growth in premiums across a range of insurance products. Growing demand for independent health insurance products has been one of the drivers for increased premiums and tax receipts. Over the last few years, we have not only seen an uptick in individuals opting for independent healthcare options, but businesses are increasingly investing in a variety of healthcare and wellbeing strategies to combat the rise in economic inactivity caused by chronic illness.”
“Independent health insurance products, such as health cash plans, offer significant preventative healthcare benefits and we continue to urge the Government to consider removing or reducing the rate of tax charged to consumers on these products in order to support the general health and wellbeing of the UK workforce.”
EVELYN PARTNERS COMMENT ON IHT
Ian Dyall, Head of Estate Planning at wealth management firm Evelyn Partners, comments:
“The 2025/26 financial year opens where the previous one left off, with a predictable and substantial annual rise in Inheritance Tax receipts. Estimates last month revealed that IHT receipts for the 2024/25 financial year were 10.8% up on the previous one, and there’s nothing to suggest the current one will be any different.
“What has stirred up some interest in the Government’s intentions for IHT – aside from those announced at the October Budget – is the memo from the Deputy PM to the Chancellor leaked this week.
“That called for – among other tax rises – IHT relief on AIM shares to be removed altogether, which would go further than the current cut to 50% due for April 2026, and would save the Treasury £1billion. Whether this suggestion carries any weight with the Chancellor is unknown, but with the PM also rowing back on cuts to the Winter Fuel Allowance this week, questions are bound to arise around tax if the fiscal outlook doesn’t improve before the Autumn Budget.
“Some in Government obviously see the passing on of estates as a legitimate target for tightening up the tax net, so whether or not there are any changes to IHT reliefs at the next Budget, it would be surprising if we got to the next election without any.”
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