UK tax and regs must change

Association of British Insurers (ABI) director of financial regulation and taxation, Peter Vipond, has said in the Times that the government must make taxation and regulation attractive for insurers to stay in the UK.

“Government must chart a path between the challenges it faces in the banking sector and the need to keep the UK competitive as a location for financial services,” he wrote.

He said:

• British insurance industry contributed £8 billion in taxes to the Exchequer in 2008-09.
• It paid the third-highest amount of corporation tax of any sector and its payments were far more stable than the rest of the financial sector, despite the falls in investment markets.
• Payments of corporation tax were only 8% down for the sector, compared with 39% for the financial sector as a whole.
• Insurers have a different business model from that of banks.
• They are under pressure to locate their headquarters in the most efficient location. Ill-judged regulation or tax policy will only increase the number of companies looking to redomicile.
• The UK insurance industry remains the third-largest in the world.
• Action on tax and regulation can promote a more competitive and business-friendly environment, one that can grow this sector and increase investment in the UK.