The government has collected a record total amount from insurance premium tax (IPT), for the third successive year.
According to the most recent HM Revenue & Customs (HMRC) data, IPT collected £8.1 billion in total for the full year 2023/2024.
Revenue from IPT increased by 11 per cent to £7.3 billion in 2022/2023; the Office for Budget Responsibility (OBR) projects revenue from IPT would reach £8.8 billion by 2028/2029.
OAC head of insurance consulting Cara Spinks says: “The full year HMRC figures confirm yet another record-breaking year for IPT driven by rising insurance premiums. There is growing evidence that premium inflation is slowing but, amid record waiting lists and economic inactivity due to long-term illness, demand for health insurance continues to increase as employers look to protect the wellbeing of their workforce.
“Costs remain a challenge for this market so we would like to see a commitment from the government to reducing or removing IPT on health insurance products such as PMI and health cash plans. It is well understood that the longer an individual is off sick, the harder it is for them to re-enter the workforce, and these products support early intervention by tackling the root cause and enabling people to remain in work.
“Reducing or removing IPT would be a step in the right direction, making these products more affordable and increasing accessibility. 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.”
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