TaxCorporate TaxInsurers in tax avoidance row

Insurers in tax avoidance row

Treasury introduces anti-avoidance legislation for life insurers that Legal & General says will cost it up to £500m

The Treasury has been attacked for a ‘smash and grab’ raid on insurers.

The tax measure, the Treasury says, is an attempt to stop companies reducing
stated profits through various reserving tricks. These will be terminated as of
last week, when the changes were announced. The measures themselves will be
outlined in the finance bill next year.

The insurance industry has reacted with shock to the news, and Legal &
General has claimed it could face a bill of as high as £500m as a result.

The Treasury, meanwhile, is annoyed at the suggestion that this was a ‘smash
and grab’ raid, with a spokesman saying: ‘these are targeted measures aimed at
stopping unjustifiable pieces of tax avoidance. People with genuine concerns are
welcome to discuss them with us as the draft legislation is prepared.’

The insurers have complained about a lack of consultation on the issue, with
the Treasury saying it does not consult on avoidance issues.

Mike Warburton of Grant Thornton said that the Treasury did sometimes consult
on avoidance legislation – such as the pre-owned assets tax – but not always:
‘They didn’t used to do any at all,’ he added, saying that consultation
procedures could often take time and involve ‘a particular procedure’.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

2m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

4m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

5m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

8m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter