Insurance Premium Tax receipts reached a record £9.04 billion in 2025/26, HMRC confirmed in March - £157 million ahead of the £8.88 billion collected in 2024/25. The May 2026 figure of £2.12 billion, published by HMRC this morning, represents a marginal £9 million dip on the same month last year and points to a steadier start to the new financial year rather than any reversal in the underlying trend.
The Office for Budget Responsibility's Spring Statement now forecasts IPT will raise £57.8 billion between 2025/26 and 2030/31 - a £500 million upgrade on the £57.3 billion projected after November's Autumn Budget, driven in part by continued demand for health-related insurance products.
Cara Spinks, head of life and health at Broadstone, said the sustained tax take reflects an appetite for health insurance that shows no sign of abating. "Appetite for health insurance remains strong - both employers and individuals continue to value faster access to healthcare services as pressures across the NHS persist, which is helping to sustain demand and place upward pressure on premiums, evidenced by record employer-funded insured admissions in 2025," she said.
Against that backdrop, the government's fit note reform has moved into its testing phase - a development Spinks describes as evidence of a "growing connection between health outcomes and workforce participation." The Department for Work and Pensions confirmed in May that pilot schemes offering up to 100,000 appointments will launch in July across four areas: Birmingham and Solihull, Coventry and Warwickshire, Cornwall and the Isles of Scilly, and Lancashire and South Cumbria, with the Department of Health and Social Care running the work jointly.
Work and Pensions Secretary Pat McFadden said fit notes are "too often a dead end - a piece of paper that tells people they can't work but does nothing to help them get better." The Confederation of British Industry welcomed the move; chief policy and campaigns officer John Foster said the current system "is broken and fails employers, workers, and the economy."
Spinks said the shift "from signing employees off work to providing better support for staying in, or returning to, employment definitely reflects a broader policy drive to address economic inactivity." But she flagged a tension the pilots do not resolve: rising health insurance premiums could make employer-sponsored cover less accessible at precisely the moment policymakers are looking to it as a workforce participation tool. "Rising premiums, however, could make cover less accessible, despite continued demand, at a time when encouraging workforce participation remains a key priority for policymakers," she said.
That tension feeds directly into a long-running argument about whether the current tax treatment of health insurance is consistent with the government's wider objectives. In November 2025, with IPT receipts for the first seven months of 2025/26 standing at £5.52 billion, Spinks called on the chancellor to remove IPT from health insurance entirely in the Autumn Budget, arguing it would "more than pay for itself through improved health outcomes and productivity." No change was announced when the Budget was delivered on 26 November.
The fit note pilots give the argument renewed relevance. "Improving access to preventative healthcare and early intervention services, especially through employer-sponsored cover, could help more people remain economically active while also reducing pressure on public healthcare provision," Spinks said. With the OBR now projecting a further uplift in IPT receipts over the next five years, the case for reviewing how that tax interacts with the government's own workforce health agenda is unlikely to go away.
