Insurance Premium Tax (IPT) collections hit a record £8.1bn last year, with receipts in May reaching £1,431m.
This follows April’s £615m, marking a strong start to the 2024/25 tax year. In the first two months, IPT receipts totalled £2bn, an increase of £228m compared to the same period last year.
Cara Spinks, head of insurance consulting at independent consultancy Broadstone, said: “Demand for private healthcare insurance products, like PMI and health cash plans, has soared following the increase in NHS waiting lists over the last three years, with many people waiting over 18 weeks for treatment.
“Cost remains a significant issue, with healthcare costs continuing to drive up premiums across the insurance market. It means that IPT is a lucrative source of tax revenue for the Treasury, with the rate of IPT more than doubling from 5% in 2011 to its current rate of 12%.
“The private market has an important role to play in alleviating pressures on the NHS as well as the wider economy given the surge in economic inactivity due to chronic sickness the nation has experienced.
“We would like to see the next government move in the opposite direction and consider reducing or removing IPT on health insurance products such as PMI and health cash plans. This would help make these products more affordable meaning 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.”
