More than £1.4bn was collected in Insurance Premium Tax (IPT) in May as receipts continued their long-term rise.
A total of £1.431bn was collected in IPT last month compared to £615m in April, the first month of the tax year, according to the latest statistics.
Overall the two months combine to more than £2.046bn in IPT receipts, an extra £228m compared to the £1.8bn for the corresponding months in 2023 – a rise of around 13%.
The amount follows the record-breaking £8.1bn collected in IPT last year and represents another period of strong growth.
Over the same period in 2023, IPT receipts increased by around £100m to £1.8bn – compared to £1.7bn collected by the same point in 2022.
In November the Association of British Insurers (ABI) renewed its call for a cut in IPT on private medical insurance (PMI).
Cara Spinks, head of insurance consulting at Broadstone, said: “Demand for private healthcare insurance products, like PMI and health cash plans, has soared following the increase in NHS waiting lists over the last three years, with many people waiting over 18 weeks for treatment.
“Cost remains a significant issue, with healthcare costs continuing to drive up premiums across the insurance market. It means that IPT is a lucrative source of tax revenue for the Treasury, with the rate of IPT more than doubling from 5% in 2011 to its current rate of 12%.
“The private market has an important role to play in alleviating pressures on the NHS as well as the wider economy given the surge in economic inactivity due to chronic sickness the nation has experienced.
“We would like to see the next government move in the opposite direction and consider reducing or removing IPT on health insurance products such as PMI and health cash plans.
“This would help make these products more affordable meaning more employees would get access to the healthcare they need to be productive at work, reduce absenteeism and increase productivity, all the while reducing the pressures on public health services.”
