Insurers baulk at £8.2bn tax burden
The Association of British Insurers (ABI) is pleading with the Government to create a more business friendly environment in the UK, and the body warns that more insurance firms will exit if its arguments are not taken seriously.
According to new research, insurers paid only 8.4% less corporation tax in 2008/09 than in the previous tax year, despite a 39% fall for the financial services sector as a whole over the same period.
The study, by PricewaterhouseCoopers for the ABI, found insurers paid £3.2 billion in combined business taxes in 2008 and collected a further £5 billion for the Government, making a total tax contribution of £8.2 billion.
The figures reflect an average insurance company wage of £42,000, compared to the national average wage of £25,000, meaning insurers pay a typical £18,667 in employment taxes per worker.
The ABI’s director of financial regulation and taxation, Peter Vipond, says: “The real danger for UK plc is insurers deciding to locate away from the UK.”
He adds: “Financial centres, such as the Netherlands, Ireland and Hong Kong, have emphasised their friendly attitude to business … the UK cannot afford to stand still as other financial centres become more attractive.”
Since September 2006, Hiscox, Omega, Kiln, Hardy Underwriting, Beazley and BRIT have all left for sunnier tax climes.
Category: ABI News, Financials, Insurance News
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