Insurance Premium Tax is one of those sneaky, extra taxes which the responsible have to pay, whilst those who choose to holiday abroad, or drive without any cover, get benefits and other State support in the event of an accident. It’s time to right this IPT wrong and the industry needs to campaign harder on penalties like asset seizures and wage/benefits deductions for those who drive uninsured. Likewise those who choose to travel without cover should be sent a £2500 bill for Consular support, with bailiffs fees, asset seizures etc if they refuse to pay.
Insurance is ultimately a pool of money each year, paid by those who see the risks, so that the few have their claims paid. If a certain percentage, which is rising every year, refuse to pay for insurance then the whole system collapses. A tax which started at just 2.5% is now at 20% and many consumers are blaming insurers for that rapid rise in premiums, when in reality the successive governments of the last 15 years are responsible for much of the percentage increase.
Here’s the word;
New HMRC figures released today show that Insurance Premium Tax (IPT) has generated £7.70 billion in the first ten months of the 2025/26 financial year (April–January), with £872 million collected in January alone – a record for this month.
This represents a £134 million increase on the same period last year, when IPT receipts for the first ten months of 2024/25 came to £7.56 billion, contributing to a record annual total of £8.88 billion.
The Office for Budget Responsibility’s Autumn Budget forecasts indicate that IPT receipts remain on track to reach £8.97 billion in 2025/26, rising to £10.1 billion by 2030/31, with continued demand for health‑related insurance products contributing to this growth.
Commenting on the latest figures, Cara Spinks, Head of Life & Health at leading independent financial consultancy Broadstone, said: “With only two months of the financial year remaining, IPT receipts are expected to reach yet another record high, with January’s record figure pushing the year‑to‑date total to £7.7 billion.
“Claims across workplace health insurance continue to rise, and more employers are turning to health insurance products such as private medical insurance (PMI) and Health Cash Plans to support their workforces amid the growing impact of chronic sickness.
“The pressure of poor employee health on employers remains significant. According to the CIPD, employees were off sick for an average of 9.4 days in the past year, a significant increase from the pre‑pandemic average of 5.8 days. At the same time, NHS pressures continue to shape employer behaviour, with PMI covering approximately 7.6 million people in the UK as more individuals seek faster diagnosis and treatment.
“IPT reduces the affordability of health insurance products and is increasingly regarded as a barrier to wider adoption of these essential benefits by employers and individuals. The Government ought to review the tax’s impact on health insurance and consider introducing an exemption. Doing so would support employers in delivering the ambitions of the Keep Britain Working review and help ease some of the workforce pressures constraining UK productivity.
https://assets.publishing.service.gov.uk/media/69919243492ea446ea7f4427/NS_Table.ods
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