Chancellor Rachel Reeves looks set to collect record Insurance Premium Tax (IPT) receipts for this financial year, latest figures from HM Revenue & Customs show.
Consumers collectively paid £7.7bn between April and January, £134m more than they did during the same 10-month period a year earlier, when the tax was worth £7.56bn.
A record January was a factor driving such growth with £872m raised during the month.
This puts IPT receipts on track to hit The Office for Budget Responsibility’s (OBR) £8.97bn forecast for the 2025/26 tax year, ahead of the £8.88bn recorded for 2024/25.
The OBR also predicts that continued demand for health insurance products could push IPT receipts as high as £10.1bn by 2030/31.
Sick days
Commenting on the latest figures, Cara Spinks, head of life and health at independent financial consultancy Broadstone, said that with only two months of the financial year remaining, IPT receipts look set to hit another record high.
She puts this down to rising claims in the workplace as employers face the growing impact of chronic sickness.
“The pressure of poor employee health on employers remains significant,” Spinks said, pointing to figures from the CIPD showing that employees were sick for an average of 9.4 days in the past year, higher than the 5.8 days recorded during Covid.
“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,” Spinks said.
“The government ought to review the tax’s impact on health insurance and consider introducing an exemption,” she added.
“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.”
