Insurance Premium Tax (IPT) receipts reached a “record” £7.34bn for the 2022/23 financial year, an increase of 11% from the £6.63bn in 2021/22.

The 2022/2023 figures also represent a 18% increase compared to five years prior with £6.2bn collected in 2018/19.

In the first four months of this year IPT receipts totalled £2.76bn, a 27% increase compared to the same period last year.

According to actuarial consultancy OAC, part of the Broadstone Group, this shows the rising cost and growing demand for health insurance products has increased intake for the Treasury.

Head of insurance consulting Cara Spinks said: “There appear to be two main drivers for the growth in IPT receipts. The first is the inflation in premiums due to increased healthcare costs which feeds directly into tax receipts for the Treasury.

“The second is the increase in demand for private health insurance due to the currently overburdened NHS, which is driving individuals and employers to arrange additional cover.

Spinks added: “Long-term sickness in the UK is increasing and the industry is calling for a reduction in the rate of IPT to make premiums more affordable.

“Economic inactivity is a significant headwind on the UK economy and, whilst the Treasury might take a short-term hit on IPT receipts, over the longer-term minimising IPT could, conversely, pay for itself through increased productivity from an able and healthy workforce, and economic growth.”

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