Insurance Premium Tax (IPT) receipts have risen by more than £500m in the first eight months of the year.
According to data from HM Revenue and Customs (HMRC), IPT receipts broke the £6bn mark for April to November 2023 and were almost 11% higher than the same period in 2022.
The total of £6.027bn was up £579m or 10.6% from April to November 2022 and is more than £1bn higher than the same period in 2021.
If figures continue at the same rate it could see IPT receipts break £8bn for the whole of the 2023-24 tax year – exceeding last year’s £7.34bn.
The health and protection sector has been lobbying the government for IPT cuts to encourage people to take out insurance and help reduce the pressure on the NHS.
However, some members of the sector believe any cuts should be directed towards reducing P11D liabilities to encourage employers to offer wider coverage to employees.
Cara Spinks, head of insurance consulting at actuarial consultancy OAC, said: “Rising insurance costs across most sectors have driven increased premiums which have hit households, adding to budget concerns amid the cost of living squeeze.
“We have also seen other drivers emerge such as growing demand for private health insurance as employers and individuals look for alternatives to the overburdened public health service.
“With the Treasury eyeing up tax cuts ahead of General Election in 2024, minimising IPT increases could create a two-pronged economic boost in both easing the pressure on household finances and reducing economic inactivity.”