The British population is currently grappling with a plethora of tax obligations, to an extent that event HMRC finds it hard to keep up. With allowances frozen or slashed, taxpayers find themselves under immense pressure. This burden extends even to pet owners nationwide, who are not spared from the escalating tax charges imposed by HMRC.
HMRC Records Surging Taxes as Duties and Insurance Costs Burden Britons
The increasing tax duties have put many British taxpayers under siege, especially since many allowances are either frozen or completely cut. Joe Neal, tax manager at Blick Rothenberg, said: “HMRC produced record takings for income tax, National Insurance (NI), VAT, and inheritance tax last year.” Car, home, pet insurance, and private medical insurance premiums are surging, with the insurance premium tax (IPT) currently sitting at 12%.
IPT surges to 20% on travel insurance and new cars purchased from dealerships, including insurance and electrical appliances. IPT is up 6% over a ten-year period, a considerable financial burden on many British households that struggle with the ongoing Cost of Living crisis.
IPT Income Surges as Majority of Britons Remain Unaware
As many as 84% of households pay IPT, yet two-thirds of them know little about it. According to HMRC's tax receipts, the Insurance Premium Tax income rose by 10% in 2023.
In the period stretching from April 2023 to January 2024, IPT accumulated a total of £6.5 billion for the Treasury, in comparison with £5.9 during the same period the preceding year.
OAC head of insurance consulting Cara Spinks declares: “While consumers are set to see another squeeze on their household finances, the Treasury looks set to haul in yet another bumper year of IPT receipts. Collections broke £6 billion in 2021/22, £7 billion in 2022/23, and could now surpass £8 billion through this financial year.”
“Alongside rising costs, the health insurance sector has also experienced growing demand for its products. Increased pressure on the NHS has seen more employers and individuals take out private medical insurance and health cash plans to support continued health and speed up treatment.
“With the health of the nation and workforce at the heart of the government’s promise to drive up economic growth, the reduction or removal of IPT for health insurance products such as PMI and health cash plans could support this aim by reducing economic inactivity due to chronic illness while also easing the pressure on household finances.”