Insurance Premium Tax (IPT) receipts totalled £2.17 billion in the first quarter of the 2025/26 fiscal year, according to the latest figures released by HM Revenue & Customs, prompting calls for a targeted carve-out for health insurance.
Emily Jones (pictured above), client consulting director at Broadstone, highlighted that the billion figure marked another record for the start of the financial year. However, she cautioned that rising premiums and the additional burden of IPT could make these benefits less accessible for small businesses.
"If the government is serious about revolutionising the NHS and rebooting the economy, a targeted IPT carve-out for health insurance should be on the table to help ensure a healthier, more resilient workforce," she said.
“With a significant fiscal black hole to fill, any adjustment to the IPT rate or threshold seems unlikely,” Jones said. “But that would be short-sighted. IPT growth is being fuelled by rising demand for health insurance, as poor access to NHS services drives more people towards private and employer-provided care. Upcoming strike action will likely add pressure on already overstretched NHS resources and accelerate this trend.”
The latest amount represents an increase of £55 million, or 2.6%, compared to the same period in 2024/25, when receipts stood at £2.12 billion. The updated data reflects ongoing growth in tax collected from insurance products, with the IPT continuing to generate significant revenue for the UK Treasury.
Comparatively, HMRC data from the 2024/25 fiscal year showed that IPT receipts reached £8.88 billion, the highest annual total on record. This marked a 9% increase compared to the £8.15 billion recorded the previous year, reflecting continued growth in the tax’s contribution to public finances.
The Financial Conduct Authority’s Financial Lives 2024 survey revealed that 14% of UK adults—approximately 7.6 million people—now hold private medical insurance. This figure has risen from 6.7 million in 2020, and the expansion in coverage is viewed as a contributing factor to increased IPT revenue.
Calls for reform of IPT continue from within the insurance sector. Industry groups including the British Insurance Brokers’ Association (BIBA) and stakeholders such as Broadstone have advocated for a targeted IPT relief measure focused on health insurance.
They argue such a move could make coverage more affordable, ease pressure on NHS services, and support wider public health goals.
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