Broadstone has warned that Insurance Premium Tax (IPT) could rise in the Autumn 2025 Budget.
The government is looking for ways to raise revenue and some politicians have suggested increasing taxes on private healthcare.
Meanwhile, since Labour’s win, NHS waiting lists have gradually improved, falling from 7.62 million in July 2024 to 7.37 million in June 2025 but the backlog remains high with long-term illness continues to affect the workforce.
At the same time, IPT receipts have grown in recent years, reaching £8.9bn in 2024/25. The tax, currently 12 per cent, applies to most insurance products, including private medical insurance (PMI), and any increase would make health benefits more expensive for both employers and employees.
The potential increase would have a double impact on company-funded health benefits such as PMI and health cash plans. Employers would face higher premium costs, while employees would also pay more tax on the value of the benefit through their P11D liability, which would make the overall cost higher for both and potentially reduce take-up, according to Broadstone.
Broadstone head of health and protection Brett Hill says that higher taxes on the private health sector could be counterproductive, particularly given the economic impact of long-term illness and rising levels of workforce inactivity.
