Calls to reduce tax rates amid record IPT windfalls

New HMRC data shows that Insurance Premium Tax (IPT) receipts hit £4.54bn in the first half of the 2025/26 financial year.

The figure represents a 0.7% increase from the same period in the previous financial year, when IPT collected stood at £4.5bn.

In the previous year, the Treasury went on to earn an additional £4.38bn in the second six-month period, carrying the yearly tax earnings to a record £8.88bn.

That record figure came after IPT grew 9% to £8.15bn in the 2023/24 financial year. IPT receipts have grown 270% in the 10 years since 2015/16, when they stood at £3.29bn.

Reduced rates

The IPT rates for the majority of standard general insurance products stands at 12%, a figure that some in the industry have called to be reduced amid the government’s record tax incomes.

Cormac Bradley, senior actuarial director at Broadstone, said: “IPT receipts hit a record £8.88bn in 2024/25, reflecting the sharp rise in insurance premiums in recent years. With prices now stabilising, the government should consider reducing IPT to support growth.

“Insurance is not a luxury – it underpins lives, business resilience, trade and investment. Lower IPT would make risk management more affordable and strengthen the UK’s competitiveness.”