Insurance Premium Tax rakes in a record £1.35bn for Government in one month

Official tax receipts for August show IPT raised a massive £1.35 billion for HMRC in a single month – the highest amount ever and £200 million more than it raised in August 2017. This is more than four times higher than the so-called sugar tax is expected to raise in a whole year.

Further calculations show that the tax take from IPT for the last 12 months has now hit £6.13 billion, more than that brought in by sin taxes on beer, wine or gaming in the same period. The Treasury predicted revenues of £6 billion from IPT for the financial year 2018/19, so these new figures suggest that taxpayers are paying even more than expected.

The standard rate of IPT has been increased three times since 2015, last going up from 10 per cent to 12 per cent in June 2017. It applies to the vast majority of policies sold, including property, motor, health, pet and business insurance.

IPT is the Mother of all Stealth Taxes because:

Huw Evans, Director General of the ABI, said: “Insurance Premium Tax is the Mother of all Stealth Taxes. Despite insurance customers paying more and more of it, many people still remain unaware of it. Insurance customers are responsible people, abiding by the law and taking sensible steps to protect themselves, yet this responsible behaviour has been punished by repeated rises in IPT. The Chancellor should look elsewhere in his efforts to balance the books.”

Based on the Government’s Tax and NIC receipts statistics table, this is how much money HMRC has received from the following taxes and duties in the 12 months between October 2017 and September 2018 inclusive:

The ABI’s digital campaign, #IPTsUnfair, has been viewed by nearly two million people on Facebook. It urges the Government to end its Raid on the Responsible by ruling out further rises in IPT. See the film here.