OBR revises Treasury tax earnings projections up by £500m

The Office for Budget Responsibility (OBR) has revised its previous Insurance Premium Tax (IPT) forecasts, raising the projected income the Treasury will see by £500m across the 2025 to 2031 period.

The new figures, released today (4 March 2026) to accompany the government’s Spring Statement, now predict that IPT receipts will total £57.7bn between the 2025/26 and 2030/31 financial years, up from £57.3bn.

The announcement reiterates a trend of quickly growing tax income, with HMRC’s January 2026 posting of £872m putting this year on track to break the previous £7.56bn income record set in 2024.

The additional £500m is set to be sourced from an additional £100m uplift in each of the next six years, except the 2028/29 financial year.

Elevated premium inflation

Cormac Bradley, senior actuarial director at financial consultancy Broadstone, said: “IPT receipts for the current financial year are projected to be around £9bn, up from last year’s record £8.8bn, underlining the extent to which IPT has become an established and growing contributor to Treasury revenues.

“Higher IPT receipts have largely reflected the period of elevated premium inflation across motor, home and commercial insurance lines. While pricing pressures are beginning to moderate, premiums remain above historic levels and IPT is applied directly to those costs.”

He continued: “Insurance plays a critical role in the economy, safeguarding households and businesses, supporting day‑to‑day trade and providing the certainty that underpins investment.

“As tax revenues continue to rise, it is important that policymakers remain mindful of the cumulative impact of IPT on the affordability and accessibility of essential general insurance cover and strike the right balance between fiscal objectives and maintaining adequate protection across the economy.”