Brokers placing and renewing health insurance business are facing an increasingly visible cost to explain to clients, as HMRC data published this morning shows Insurance Premium Tax (IPT) receipts continuing to climb, with a decision on the rate now just weeks away at the Autumn Budget.
Cara Spinks, head of life & health at Broadstone, said rising demand and rising premiums for health cover are feeding directly into the higher tax bill sitting on top of every policy sold.
HMRC figures show IPT receipts for April to August 2026 reached £4.49bn, marginally below the £4.50bn collected over the same five months last year. Monthly receipts for August 2026 stood at £1.52bn, up £220m from the £1.30bn recorded in August 2025. Full-year receipts for 2025/26 reached a record £9.04bn, £157m above the previous year's £8.88bn, and the OBR's Spring Statement forecasts now put the tax on course to raise £57.8bn between 2025/26 and 2030/31, a £500m upgrade on the £57.3bn estimate made after last November's Autumn Budget.
Full-year receipts for 2025/26 reached a record £9.04 billion, £157 million above the previous year's £8.88 billion, and the OBR's Spring Statement forecasts now put the tax on course to raise £57.8 billion between 2025/26 and 2030/31, a £500 million upgrade on the £57.3 billion estimate made after last November's Autumn Budget.
Spinks said the pattern reflects both take-up and cost pressure in the market brokers are placing into.
"IPT continues to generate significant revenues for the Treasury, with receipts remaining on an upward trend as demand for insurance products grows and premiums increase," she said. "In the health insurance market, demand remains strong as employers and individuals seek quicker access to healthcare and additional support services. At the same time, higher medical inflation is feeding through into increased premiums, which is contributing to higher IPT receipts."
That demand is already visible in usage data. Broadstone's own research found private medical insurance funded hospital admissions reached a fourth consecutive annual record, even as the rate of growth in claims began to slow, indicating steady rather than accelerating pressure on the schemes brokers are advising clients to take out or extend.
Read more: PMI-funded admissions hit fourth record year as claims growth cools - Broadstone
Spinks linked the tax picture to the government's inactivity agenda, an area where employer clients are increasingly asking brokers for guidance.
"As policymakers look for ways to improve economic growth and reduce health-related inactivity, the case is stronger than ever for recognising the role that health insurance products can play. Products such as PMI and health cash plans provide valuable access to health screening and early intervention, as well as mental health and rehabilitation services," she said.
"Supporting access to these services would help people stay in work or return sooner and is directly aligned with the Mayfield Review, which puts employers at the heart of prevention and early intervention," Spinks added.
The Mayfield Review, formally the Keep Britain Working Review, has moved past the recommendation stage since publication. It has entered a Vanguard implementation phase, backed by a £3.5 billion employment support package, which gives brokers advising employer clients a concrete government programme to point to alongside their own cover recommendations.
Read next: Record IPT haul reignites industry push for health cover rethink
Spinks said cutting the tax would support that programme directly.
"The Review recognises that employers are uniquely placed to support workforce health before problems result in long-term absence, and reducing the tax burden on the tools that enable them to do this would be a practical way for Government to help turn those recommendations into action," she said.
The push for relief is already being made on brokers' behalf through their own trade body. The British Insurance Brokers' Association's 2026 manifesto, published in January, lists maintaining the current IPT rate for the length of this Parliament among its 10 headline asks of government, alongside a proposed IPT carve out for SME cyber policies.
That position extends beyond brokers alone, and is not new. The Association of British Insurers has, in previous years, joined similar calls for IPT relief on health insurance, alongside the Confederation of British Industry and named insurers including Axa Health and Bupa, arguing that a lower rate would ease barriers to take-up.
The point at which any of this could change falls on October 28, 2026, when Chancellor John Healey delivers his first Autumn Budget.
The government has ruled out changes to income tax, employee National Insurance and VAT rates for the rest of this Parliament, a pledge covering close to 60% of total tax receipts, which narrows the range of other taxes that remain open for adjustment. No decision on IPT has yet been announced.
