The Association of British Insurers’ (ABI) has revealed its members contributed a record £18.5bn in tax to the UK’s public finances over the last financial year.
The insurance trade body shared its total tax contribution for its members accounting periods for the 12 months up to 31 March 2024 with City AM.
The data, produced by Big Four firm PwC, marked over a nine per cent increase from the previous report, which stood at £17.2bn over 2021-22.
The total is made up of £4.1bn included VAT, corporation tax and employment taxes, while £14.4bn was through insurance premium tax (IPT), national insurance contributions, tax deducted at source including pay as you earn (PAYE) on annuities and drawdowns.
From this, a significant proportion of general insurers’ taxes was made by IPT which accounted for over 61 per cent of the contribution, while PAYE on annuities and drawdowns is the most significant tax life insurers collect, making up nearly 75 per cent of their total collected.
These latest results are more than double the amount recorded when the first survey was conducted in 2007 by the ABI, as currently, the contribution by the members account for two per cent of the government’s tax receipts.
Commenting on the data, 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,” he added.
While 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.”