Spring Statement Confirms Rising IPT Revenues
On 3 March 2026, Chancellor Rachel Reeves delivered a relatively low-key Spring Statement. However, one key takeaway for insurance customers was the confirmation that tax receipts from Insurance Premium Tax (IPT) continue to rise.
If you buy personal or commercial insurance in the UK, you pay 12% tax on top of your premium. This tax goes directly to the Government.
It’s important to note that insurers and brokers simply collect this tax on behalf of the Treasury. Companies such as Anthony Jones Insurance Brokers do not earn any revenue from IPT.
IPT Forecast to Generate £57.8 Billion
The Government now forecasts that Insurance Premium Tax will raise £57.8 billion between 2025/26 and 2030/31.
This is £0.5 billion higher than the £57.3 billion projected at the Autumn Budget.
Despite no increase in the headline 12% rate, tax receipts are expected to rise steadily year after year. By 2030, annual IPT receipts are forecast to reach close to £10 billion.
A Missed Opportunity to Reduce Costs
Following last year’s Spring Statement, we highlighted IPT as a clear opportunity for the Government to reduce the financial burden on insurance buyers.
Unfortunately, that opportunity was not taken.
The reason is simple:
Insurance Premium Tax has become one of the UK Government’s most reliable and fast-growing revenue streams.
IPT Is Now a Major Government Revenue Source
IPT has quietly grown into a multi-billion-pound pillar of government revenue.
Key figures highlight its rapid growth:
- £8.88 billion was collected in the 2024/25 financial year, a 9% year-on-year increase and roughly three times the amount raised a decade ago.
- HMRC data shows monthly record receipts, including £1.48 billion collected in May 2025 alone.
- The Office for Budget Responsibility forecasts £9.2 billion in IPT receipts in 2025/26, rising to £9.9 billion by 2030.
This places IPT in the same revenue bracket as other significant taxes such as Inheritance Tax and Air Passenger Duty.
Why IPT Matters for Businesses and Households
Put simply, businesses and individuals are paying more for insurance while also paying more tax on those premiums.
This is happening at the same time many organisations are dealing with:
- Cost inflation
- Economic uncertainty
- Rising operational expenses
Reducing IPT could have been a straightforward way for the Government to ease cost pressures across the economy.
The Impact on Businesses and Risk Management
Anthony Jones Insurance Brokers highlight several key concerns about the continued growth of IPT:
- IPT is regressive, disproportionately affecting lower-income households and SMEs.
- Premium inflation amplifies the tax, increasing costs even without a rate rise.
- Businesses face reduced investment capacity as insurance costs climb.
- Risk management suffers, with some organisations reducing cover or self-insuring to cut costs.
- Underinsurance is becoming more common as customers scale back policies or reduce insured values.
“It’s Just So Unfair”
As Steve Green, consultant to Anthony Jones, puts it:
“It’s just so unfair.”
For many businesses and households, Insurance Premium Tax represents a growing hidden cost—one that continues to rise even when tax rates stay the same.
