The 2004 Budget was described as “reasonably neutral” for the insurance industry by Andrew Green, insurance expert and head of tax at accountancy firm Mazars in London.
Green said although there were few measures aimed specifically at the insurance industry, there were several positive moves within Gordon Brown's eighth Budget.
Changes to the tax barriers affecting Lloyd's Names wishing to switch to limited liability were encouraging, said Green, although he was unsure of the impact the change would have.
“The changes are a move in the right direction,” said Green, but he questioned whether it would encourage more Names to make the change to limited liability.
“It is good to see the changes in place but is the switch to limited liability something the names will really want to do?” asked Green.
He said a collective scheme for Names could be more attractive to them and to the Lloyd's market, and questioned whether an initial switch to limited liability would result in Names having to move again in a few years time to form a larger collective within the market.
Changes to the rules on Enterprise Management Shares (EMI), a popular way of providing share options for employees, could also impact on the industry, but only for brokers, said Green.
“Brokers have sometimes had problems meeting the requirements for EMI schemes,” he explained.
“A brokerage wanting to recruit a team of brokers will be able to structure the arrangement so that they qualify for an EMI scheme much more easily following the Budget changes.”
