Ahead of the Spring Statement this Wednesday, Anthony Jones Insurance Brokers urge Rachel Reeves to include a review of Insurance Premium Tax (IPT).
This is not the first time we’ve lobbied for a reduction in this tax. Before the budget in the Autumn, we called for it to be reduced or even abolished completely.
IPT currently sits at 12% for motor, home and commercial insurance. It’s even higher for travel insurance at 20%.
We continue to support the stance taken by both The British Insurance Brokers’ Association and the Association of British Insurers who have repeatedly called for a reduction in the tax.
It makes particular sense for the Labour Government to reduce the IPT burden on drivers, especially young drivers, given their apparent support for telematics. They could opt to reduce or remove IPT for telematics insurance, thereby incentivising young drivers to adopt telematics, which would potentially have the knock on effect of reducing accident frequency.
However, IPT is a lucrative source of income for the Government. The latest HMRC data shows IPT receipts stood at £1.3bn for February 2025, bringing the 11-month total for the 2024/25 financial year to £8.8bn. This is already more than was collected for the full 2023/24 financial year, when the total stood at £8.1bn.
