Chancellor John Healey left insurance premium tax (IPT) unchanged in his first Budget, and the British Insurance Brokers’ Association (BIBA) has renewed its call for a commitment to freeze it for the rest of this Parliament.
Chief executive Graeme Trudgill said the decision would be a relief to households and businesses already under pressure, but that “at 12p in every pound of premium it remains a tax on protection”. BIBA wants the government to freeze IPT and then reduce it, “so that cover stays affordable in every postcode”, he said.
IPT is charged at a standard rate of 12% on most general insurance premiums, with a higher rate of 20% on some products, including travel insurance. Speaking to Insurance Business ahead of the Budget, Trudgill warned that raising the tax would be a mistake for a government seeking growth.
The Association of British Insurers (ABI) welcomed the Budget’s focus on reassurance for households and businesses. Director general Hannah Gurga said stability, certainty and proportionate regulation are essential to the conditions for investment, and that savers’ interests must remain at the heart of investment decisions as the government sets out more detail on its plans.
The Office for Budget Responsibility puts IPT receipts at £57.6bn over the six years to 2030/31, a marginal downgrade on its March forecast. Receipts, which reached a record £9.04bn in 2025/26, are forecast to climb to £10.2bn by 2030/31.
Health cash plans and private medical insurance remain taxed at the same 12% rate as car insurance, and employer-funded benefits also attract income tax for employees and National Insurance for employers, Westfield Health said. With the National Living Wage rising 3.9% to £13.21 an hour next April, employers are making hard choices about where their money goes, it added.
“Health support shouldn’t be the thing that gets cut. It’s what keeps people well, in work and productive,” said Dave Capper, chief executive of Westfield Health.
Cara Spinks, head of life and health at Broadstone, said the Budget had missed an opportunity to use the tax system to encourage employers to invest in workforce health, and that targeted incentives could improve access to care and complement the NHS.
Broker owners planning a sale face a smaller tax break after the lifetime limit for Business Asset Disposal Relief was halved from £1m to £500,000 from April 2027. A new Founders’ Relief will offer a 10% capital gains tax rate on up to £10m of lifetime gains, though it is aimed at founders of high-growth, innovative companies.
Jamie Richards, head of M&A at Ripe Thinking, said some deals may be brought forward, but he does not expect a rush to sell. After several years of change around capital gains tax and reliefs, owners who are particularly tax-driven have already had plenty of incentive to accelerate an exit, and for most sellers valuation, timing and finding the right home for the business will matter more than tax, he said.
“Buyers will continue to price businesses based on their quality, growth prospects and strategic fit, rather than a seller’s personal tax position,” Richards said. Where the change may show is in deal structure, with some sellers placing more value on cash and certainty at completion than on deferred consideration through earn-outs or rollover equity, he said.
The Budget also set out a fiscal devolution roadmap for England, giving mayors a share of business rates and income tax. Kella Bowers, head of insurance at Forbes Solicitors, said: “Fiscal devolution is not just about decentralising spending power, it also decentralises risk.”
For brokers, the Budget brings stability on IPT but no relief, leaving the cost of protection, and of health cover in particular, a live issue at renewal.
