Insurance Premium Tax (IPT) revenues totalled £6.8 billion in the first nine months of the 2025/26 financial year, according to figures released by HM Revenue & Customs. The April to December period saw £43 million collected in December alone.
The latest data shows IPT receipts running £115 million higher than the same period in the previous financial year, when collections reached £6.7 billion. The 2024/25 financial year concluded with a record annual total of £8.88 billion.
The Office for Budget Responsibility's Autumn Budget projections indicate IPT receipts for 2025/26 could reach £8.97 billion. Forecasts suggest the figure may rise to £10.1 billion by 2030/31 as demand for health-related insurance products continues.
The HMRC data follows a report from the Association of British Insurers, published yesterday, which found that insurers processed a record £4 billion across individual and workplace health schemes in 2024. This represents a 13% increase compared to the £3.57 billion recorded in 2023, equating to approximately £11 million paid out daily.
These rising claims come amid persistent cost pressures on employers. Medical inflation currently sits at 17% and is expected to remain in double digits into 2026, according to Broadstone.
Cara Spinks (pictured above), head of life and health at financial consultancy Broadstone, said the December figures indicate the tax "shows no signs of easing" as the year-to-date total climbs.
She noted that workplace health insurance claims continue to rise, with employers increasingly adopting private medical insurance and health cash plans due to productivity concerns stemming from long-term sickness and NHS access issues.
"The UK's persistent ill-health burden is acting as a drag on economic growth, and employers are increasingly being left to shoulder the consequences," Spinks said.
She called on the government to reassess IPT's role in relation to health insurance, suggesting an exemption could support workforce participation.
"This would empower employers to provide the support needed to help deliver on the aims of the Keep Britain Working review and underpin the UK's broader growth ambitions," she said.
