The Association of British Insurers (ABI) has said that the UK’s insurance industry contributed £17.2bn in tax between 2021 and 2022.
This, said the association, is a ‘record’ amount, 6.9% higher than in 2019-2020, and makes up 2.1% of the government’s tax receipts. The survey, it wrote, was carried out on the ABI’s behalf by PwC.
The total contribution comprises £4.8bn of taxes borne, such as corporation tax irrecoverable VAT and employment tax, and £12.4bn of taxes collected through insurance premium tax (IPT), employee income tax, and national insurance contributions. The report says that the rate of insurance premium taxdoubled from 6% in 2014 to 12% in 2020.
Based on survey responses from 29 ABI members, the study used data on UK tax payments in accounting periods ending 31 March 2021 and 31 March 2022. The participating companies represent 77% of the total gross written premiums (GWP) written by ABI members in 2021-22, and 84.4% of the total UK workforce in the UK industry, so are representative of the sector.
Mervyn Skeet, director of general insurance policy at the ABI, said: “With these latest record figures, there is no doubt that the sector is key in not only securing the futures of everyone in the UK, but also the economy as well.”
He added: “Given the turbulence in the market over the past year these results prove that, when faced with challenging conditions, the sectors’ tax and wider economic contribution remains significant. There are both challenges and opportunities in the year ahead. We look forward to seeing the benefits of the Solvency II reform and continue to ask for the introduction of key global tax reforms to include the latest international guidance and be consistent with other jurisdictions.”
