Insurance Premium Tax receipts reach £8.95 billion in 2025/26 to February, while rising premiums and tax charges raise concerns over access to workplace health cover.
HM Revenue & Customs (HMRC) data show that £1.26bn was collected in February, bringing the total for the first 11 months of the financial year to £8.95bn. The figure is £130m higher than the £8.82bn recorded over the same period a year earlier, when full-year receipts reached £8.88bn.
Earlier HMRC releases indicated a consistent build-up in receipts through the year. Data published in October showed £4.54bn collected in the first half of 2025/26, rising to £5.52bn by early November, according to industry reporting. The latest figures extend that trajectory into the final quarter of the financial year.
“February’s figures reinforce the trajectory for IPT, with receipts continuing to build towards what looks set to be another record-breaking year. With £8.95 billion collected so far this financial year, the tax remains an increasingly significant contributor to Treasury revenues,” said Cara Spinks (pictured), head of life & health at Broadstone.
“Rising claims in workplace health benefits are a key driver behind this trend, set against sustained pressure on NHS capacity and persistently high waiting lists. Employers are increasingly relying on products such as private medical insurance and health cash plans to support staff, as long-term sickness and chronic health conditions continue to impact the workforce.
“These products can support productivity and retention by enabling earlier intervention, diagnosis and preventative care, while also helping to ease pressure on NHS services. The scale of the challenge is significant: recent data shows average sickness absence remains well above pre-pandemic levels, with more people seeking faster access to treatment through private cover.
“However, rising premiums and IPT are undermining affordability and limiting access at a time when these benefits are most needed. If the Government is serious about reducing economic inactivity and supporting growth, it should review the role of IPT on health insurance, including the potential for targeted exemptions. This would remove barriers to wider uptake, support employers to keep people in work, and align with the ambitions of the Keep Britain Working review.”
Historical HMRC data show that IPT has recorded steady increases over recent years. Receipts rose to £8.88bn in 2024/25, following £8.15bn in 2023/24, and have grown from £3.29bn in 2015/16. The standard IPT rate for most general insurance products remains at 12%.
The progression through the current financial year remains consistent with that pattern. The cumulative £8.95bn to February already exceeds the prior year’s April to February total of £8.82bn, with one month of receipts still to be recorded.
The IPT trend sits within a wider fiscal context. Reporting by the BBC in November 2025 noted that income tax thresholds will remain frozen until 2031 following the Budget, extending the period during which more taxpayers may move into higher bands. The Office for Budget Responsibility (OBR) estimates that the policy will bring additional taxpayers into higher rates and raise £8bn in 2029–30.
For employers, National Insurance contributions remain relevant alongside IPT. From April 2025, employers pay NI at 15% on wages above £5,000, with the threshold frozen through to 2030–31. These measures form part of the broader tax setting in which insurance costs are assessed.
Updated projections from the Office for Budget Responsibility, published following the Spring Statement, show IPT expected to generate £57.8bn between 2025/26 and 2030/31. This compares with a £57.3bn forecast issued after the Autumn Budget in November, representing a £500m revision.
The forecast aligns with the pattern of receipts recorded in HMRC data for the current financial year.
