According to analysis from UHY Hacker Young, the 2017/18 total of £5.94bn was up 22% on £4.88bn collected the previous year. The government increased the IPT rate from 10% to 12% in June last year, having first announced it in the 2016 Autumn Budget. 

UHY Hacker Young says the government forecast that the IPT increase would generate an extra £680m in tax raised. However, the added tax raised from businesses and consumers totalled £808m last year.

One of the key factors driving the higher than expected tax take is that businesses are having to take out more insurance policies than in the past. This has meant that, combined with the IPT increase itself, businesses are being hit twice, the firm says.

As an example, UHY Hacker Young said businesses are having to insure against the growing threat of cybercrime. Recent research shows that nine out of ten UK businesses now have cyber insurance, up from just two in three a year ago.

UHY Hacker Young calculated that the income generated by IPT has risen by 55% in two years, up from £3.8bn in 2015/16.

Richard Lloyd-Warne, partner at UHY Hacker Young, said: ‘The Treasury is benefitting from the necessity of insurance by more than they had originally expected.

‘The fact is that businesses are now facing more threats than ever, all of which must be insured against. Just as the risk of a cyber-attack has ballooned over the last few years, new threats are likely to spring up in the future.

‘There are also a range of other insurance policies that many businesses are forced to buy such as employees’ liability insurance and professional indemnity.

‘The government, however, could choose to concentrate taxation on areas that they want to discourage, rather than taxing something that businesses have little choice to do.’

Report by Pat Sweet