What's Happening?
The UK Treasury has reported that insurance premium tax (IPT) receipts reached £1.03 billion in July, marking a 7% increase from the previous year. This brings the total IPT collected in the first four months of the 2025 financial year to £3.2 billion, up £123 million from last year. The Office for Budget Responsibility forecasts a full-year IPT income of £9.2 billion, potentially breaking the previous record of £8.88 billion set in 2024. The government faces pressure to cut IPT, with campaigners arguing that reductions could boost business confidence and support working people.
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Why It's Important?
The increase in IPT receipts highlights the growing reliance on private health insurance due to pressures within the NHS. As premiums rise, the added burden of IPT risks making coverage unaffordable for many. A targeted IPT relief on health insurance could maintain affordability, widen access, and deliver economic benefits by supporting smaller employers and easing pressure on public health services. The government's decision on IPT could significantly impact the insurance industry and public health policy.
What's Next?
With the impending autumn budget, the government has an opportunity to address IPT rates. Stakeholders in the insurance industry and public health sectors will likely advocate for targeted relief measures. The decision could influence the affordability and accessibility of health insurance, affecting workforce productivity and public health service demand.
