The £18.5 billion tax contribution for their accounting periods which ended in the 12 months up to 31 March 2024, marks a 9.1% increase since the previous report. This is more than double the amount recorded when the first survey was conducted in 2007 and currently accounts for 2% of the Government’s tax receipts.
The total is made up of £4.1 billion of taxes borne, such as VAT, Corporation Tax and employment taxes, and £14.4 billion of taxes collected, either through Insurance Premium Tax (IPT), National Insurance Contributions, tax deducted at source including Pay As You Earn (PAYE) on annuities and drawdowns, or employee income tax.
Insurance Premium Tax (IPT) makes up a significant proportion of general insurers’ taxes, accounting for 61.2% of their TTC, the highest level since the survey began. PAYE on annuities and drawdowns is the most significant tax life insurers collect, making up 74.9% of their total taxes collected.
Daniel Gallon, ABI Head of Taxation, said: “Despite significant economic turbulence in recent years, the insurance and long-term savings industry has demonstrated its resilience, continuing to make significant contributions to the UK’s public finances. And with successive record contributions, the market’s value to the economy is proven.
“With the changing tax and regulatory environment, there are opportunities and challenges in the years ahead. We will continue to work with the Government and our members to ensure the industry continues to deliver for the economy and its millions of customers.”
Susie Holmes, Insurance Tax Leader, PwC UK said: “ABI members are a major contributor to the UK’s economy and deliver growth and investment up and down the country. Since the Global Financial Crisis, tax contributions from the industry have increased by over £10bn, from £8.2bn in 2008 to £18.5bn today.
“The report also highlights that the insurance and long-term savings industry employs over 300,000 people across the UK. Despite a difficult period for the UK economy over the past few years, this has increased by 1.6% since the last survey. This illustrates that the industry is a significant supporter of skilled jobs and is in a prime position to help drive UK growth going forward.”
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