This was up 9.3% from the previous year 

The Government’s income from Insurance Premium Tax (IPT) hit £6.2bn during 2018/19 (year ending 30 June).

This was a “record amount” according to UHY Hacker Young- the national accountancy firm.

The figure was up 9.3% from the previous year.

IPT receipts have more than doubled over the last five years since £3bn was collected in 2013/14.

IPT is a tax on insurance policies that all providers have to charge. In June 2017 the government increased the IPT rate from 10% to 12%, after having announced it in the 2016 Autumn budget.

In March the government vowed an operational IPT review. 

Golden goose

Richard Lloyd-Warne, partner at UHY Hacker Young, said that IPT is becoming the Treasury’s “golden goose” providing a quick and easy way to raise money.

He said: “Businesses and consumers alike who take out insurance policies unavoidably have to pay IPT. With businesses facing an increasingly sophisticated range of threats which have to be insured against, this tax looks particularly punitive.

“The risk of data leaks and cyber-attacks for example has surged in recent years and more new threats are likely to spring up in the future.

“Many businesses will also have to ensure their employees are covered by policies such as liability insurance and professional indemnity.

“It could be argued that the government should concentrate taxation on areas that they want to discourage rather than creating a disincentive for people buying insurance.”

Call for evidence

Back in June HMRC said that it was seeking views on a range of issues including the use of insurers unregistered to pay IPT and whether brokers should be allowed to foot the bill.

Its call for evidence aimed to make the collection of IPT fairer. It is currently collected through the total premium paid by the customer and includes the brokers commission.