The Treasury looks set to collect a record amount of insurance premium tax this year, with receipts to date up by 11 per cent.
HMRC tax receipts, covering the first two thirds of the 2023/ 23 tax year show the government collected £6.03bn in IPT, compared to £5.45bn in the same period the previous year. This increase is being driven by higher premiums and increased demand for certain products, particularly private medical insurance.
In the previous tax year the government collected a record amount of IPT. Cara Spinks head of insurance consulting at actuarial consultancy OAC says the receipts from IPT stood at a record level last year.
She adds: “2023/24 appears set to be another record tax-take for insurance premium tax.
“Rising insurance cost 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.”
