Insurance industry joins forces in Budget protest
The three leading insurance industry organisations have launched a joint-offensive against the Inland Revenue's proposed new tax on insurance reserves.
Outlined in the Budget, the tax is designed to take an additional £250m a year from the insurance industry, according to the Association of British Insurers, Lloyd’s and the Insurance Underwriters Association.
The three claim the proposals will damage the competitiveness of the UK insurance industry, both in the European Single Market and world-wide.
‘The insurance industry and its customers are being singled out for harsh treatment. This proposal would mean that insurers are taxed on a figure in excess of their real commercial profits and in conflict with prudent regulatory principles,’ the organisations said in a statement.
The move follows attempts by the Inland Revenue to impose discounting for tax purposes both on the corporate sector and most recently on Lloyd’s members.
Last July the City General Commissioners, an independent tribunal, found discounting could not be imposed on Lloyd’s members under existing law. The Revenue had vowed to appeal but in the small print of a Budget press release it conceded the argument.
‘Having taken legal advice, the Inland Revenue has now decided not to challenge this ruling,’ it said.
Ian Greenidge, head of the specialist names unit at Pannell Kerr Forster, said: ‘This is great news and finally brings this chapter to a close. I hope that it now does not take too long for the Inland Revenue to pay up the millions of pounds which they owe to the Lloyd’s names.’
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