The government continues to collect record amounts of insurance premium tax, with £615m collected in the first month of this financial year.
This figure is 12 per cent higher than the equivalent amount collected in April last year — making it the highest total receipts collected for this period.
This comes after a record the government collected a record £8.1bn in insurance premium tax for the last financial year.
This has been due to higher insurance premiums last year and increased demand, particularly for healthcare products. However insurance analysts noted that the rise in IPT was continuing despite premium increases slowing.
Actuarial consultancy OAC head of insurance consulting Cara Spinks says: ““Despite a general cooling in premium inflation, demand for health insurance remains high as current NHS pressures and waiting lists mean private healthcare is an increasingly attractive option for individuals, and for employers wanting to maintain a healthy and active workforce.
“Employers are increasingly stepping in to fill the healthcare gap, offering their employees a range of tailored health insurance products such as PMI and health cash plans in order to protect the health and wellbeing of their staff.
“However, health conditions appear to be getting more complex, and ultimately more expensive to treat, which in part is driven by delays in early diagnosis and preventative treatment. This means that claim costs are rising and placing upward pressure on health insurance premiums.”
She points out that the Office of Budget Responsibility is forecasting that IPT receipts will grow to £8.8bn by 2028/29.
“We would strongly urge the government to consider the importance of employers and individuals being able to access affordable and flexible health insurance products and the wider benefit it can have on the economy and the NHS. Alleviating or removing IPT on health insurance products would be a sensible, strategic move to help employers and employees be productive and successful, reducing sickness related absenteeism and relaxing the burden on the NHS.”
