Insurance Premium Tax (IPT) raised £6.5bn for the Treasury between April 2023 and January 2024 compared to £5.9bn in the same period of the previous year according to latest HM Revenue & Customs tax receipts data.
That was an increase of £600m or just over 10%.
Actuarial consultancy OAC maintained IPT is set to raise yet another record sum for the chancellor amid growing calls for a carve out for the health sector in the spring statement.
In November the Association of British Insurers (ABI) renewed its call for a cut in IPT on health insurance.
The ABI initially joined a chorus of calls on government to cut the rate of IPT on health insurance in last year’s Spring Budget.
Cara Spinks, head of insurance consulting at leading actuarial consultancy OAC, said: “Many customers will have seen their annual insurance renewal premiums increase this year as cost pressures continue to drive larger than usual premium increases across most sectors.
“With many household budgets feeling the squeeze, the Treasury is again set to receive a boost from IPT with receipts possibly nearing £8bn.
“The Spring Statement is on the horizon and a reduction in IPT on health insurance products like private medical insurance and health cash plans could be one way the chancellor could ease the burden on consumers.
“With the current pressures faced by the NHS, and delays for treatment driving the uptake in private health admissions, reducing IPT on health insurance could reduce economic inactivity, ease the strain on the public health system and support a healthier workforce.”
