Insurance premium tax (IPT) receipts reached £4.54 billion in the first half of the 2025/26 financial year, according to data released by HM Revenue & Customs.
The figure represents a £39 million increase compared to the same period last year, when collections stood at £4.50 billion. The previous financial year ultimately saw a record high IPT take of £8.88 billion.
Over a five-year period, IPT revenues in the UK have grown by 40%, rising from £6.31 billion in 2020/21 to £8.88 billion in 2024/25. Compared to a decade ago, receipts have increased by 170% from £3.29 billion in 2014/15.
The previous quarterly data shows £2.17 billion in IPT receipts during the first quarter of the 2025/26 financial year, up £55 million (2.6%) from the same period a year earlier.
Cara Spinks (pictured above), head of life and health at Broadstone, noted that the rise in IPT receipts has provided the Treasury with greater flexibility. She suggested that abolishing IPT on health insurance could serve as a public health intervention, support productivity, and help grow the mutual sector.
Spinks commented that, as the UK deals with increasing economic inactivity related to ill-health and mounting pressure on the NHS, private health insurance – particularly products offered by mutuals – has become increasingly important.
“Yet insurance premium tax (IPT) continues to act as a barrier for access to health insurance products, undermining both public health goals and the government’s ambition to double the size of the mutual sector,” she said.
Currently, IPT is set at 12% for most health insurance products, including Private Medical Insurance (PMI) and Health Cash Plans. This tax is included in premiums, which Spinks said makes policies less affordable for both individuals and employers.
“According to previous analysis of the mutual and not-for-profit sector performed by Broadstone, IPT added £98 million in costs to policyholders in 2022 alone and this figure will have risen in the period since. If IPT were to be abolished, uptake of these types of policy is likely to increase due to improved affordability. A 20% increase in policy uptake could potentially unlock an additional £65 million in benefits annually to the state even after accounting for lost tax revenue,” she said.
Spinks described the removal of IPT on health insurance as a potential strategic investment for the Treasury. She said that a targeted tax cut would allow individuals to access treatment more quickly, reduce pressure on the NHS, and support workforce productivity, which could offset any loss in tax revenue through broader economic gains.
“Mutual insurers play a unique role in complementing the NHS and the welfare state. Their not-for-profit structure allows them to reinvest in member benefits and community health. However, while general insurers and large providers can leverage economies of scale across central costs, IPT disproportionately impacts smaller mutuals,” she said.
Spinks argued that removing IPT would enable mutuals to expand, innovate, and contribute to the government’s goal of doubling the sector’s size.
“Abolishing IPT on health insurance is not just a tax reform; it’s a public health intervention, a productivity booster, and a mutual sector enabler. It’s time for policymakers to recognise that taxing health is taxing growth – and to act accordingly,” she said.
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