HMRC tax receipts for insurance premium tax (IPT) fell slightly in August this year — however the total for the year to date is still significantly higher than last year.
The data shows HMRC collected a total of £1.3bn in IPT in August, a slight decrease of £51m on the same month last year. That brings the total IPT collected in the first five months of this financial year to £4.5bn, an increase of £72m compared to the same period in last year (£4.24bn).
This morning’s HMRC update also showed the amounts collected from inheritance tax continues to climb. In the first five months of this tax year IHT receipts totalled £3.7bn — a 5 per cent increase on the same period last year.
Last year was the fourth consecutive year that the amounts raised through IHT hit a new record, with the government collecting a total of IHT £8.2bn for the 2024/25 financial year.
The OBR’s most recent forecast, published at the Spring Statement, projects a fifth record year, with IHT is predicted to generate £9.1bn for the Treasury in 2025/26 and more than £14 billion by 2029/30 once pensions become subject to
Stephen Lowe, director at retirement specialist Just Group says: “With rising asset prices, frozen thresholds and last year’s reforms IHT looks set to deliver a bumper tax take for the fifth year in a row.
“As the Chancellor continues to feel the fiscal pressure, and having ruled out hikes on major taxes, she will want to explore all her options to raise revenue. Given inheritance tax targets those who are wealthiest in society it’s entirely possible that it will once more be in the Chancellor’s sights.
“With more estates being subject to IHT, and the prospect of further changes to the rules on the horizon, it is important that people keep track of the valuation of their estate, including a recent assessment of their property wealth.
“Estate planning is complex and difficult, so many families may find it beneficial to seek professional financial advice to understand their circumstances, the impact of the IHT regime and their options for minimising tax liabilities.”
Brett Hill, head of health & protection at Broadstone adds: “Today’s HMRC data shows another insurance premium tax windfall for the Treasury as it continues to climb to record levels.
“An important driver behind this growth is likely to be surging demand for health insurance products as more individuals seek out alternative provision amid poor access to NHS services with millions left in limbo with undiagnosed and untreated conditions.
“Over the last few years, we have seen employers substantially widen their coverage of products like PMI and health cash plans to meet this rising demand and support staff, combat absenteeism and sustain productivity.
“But this trend carries consequences – rising claims and more complex, expensive treatments due to delayed care are already pushing premiums higher, putting pressure on affordability for individuals and businesses.
“If the Government wants to boost growth and ease the strain on the NHS, it must resist any hike to IPT in the Autumn Budget as it looks for revenue raising measures to fill its fiscal gap.”