Insurance Premium Tax on track for record year amid Budget rate hike speculation

Insurance Premium Tax (IPT) receipts have totalled £5.52bn across the first seven months of the 2025 financial year, according to new data from HMRC.

The figure – which covers the period between 6 April and 6 November 2025 – is £68m higher than in the same period last year, when insurance tax brought in £5.45bn for the Treasury.

That year went on to set the record for the highest ever IPT earnings at £8.88bn, a high-water mark that will be broken this year if current forecasts are delivered.

As reported on by Insurance Times at the time, HMRC’s previous announcement of record IPT receipts led to calls for the tax rate to be lowered.

However, far from being provisioned a rate cut, IPT has been speculated about as a possible target for a rate hike when chancellor Rachel Reeves announces the Autumn Budget next week.

Growing contradiction

Cara Spinks, head of life and health at financial consultancy Broadstone, said: “With the Autumn Budget just days away, HMRC’s latest figures showing IPT receipts of £5.52bn expose a growing contradiction.

“Since the pandemic, products like private medical insurance and health cash plans have been critical in keeping the UK workforce healthy and easing pressure on the NHS – a cornerstone for driving economic growth.”

She continued: “Yet, with waiting lists still at record highs, IPT acts as a barrier to uptake for both employers and employees. It risks stalling the progress made in reducing NHS backlogs and undermines the Government’s growth ambitions.

“The chancellor has an opportunity next week to fix this. Removing IPT from health insurance would more than pay for itself through improved health outcomes and productivity.”