hiscox insurance company bermuda
The UK government must continue to work with the insurance industry to ensure a stable tax system, predictable and competitive, taking into account the increasing competition in a world where global capital is highly mobile, a new report has concluded.
The report of the Working Group of the insurance industry, a government policy as a whole Industry group urges the Government to take measures to prevent loss of business from the UK to lower taxes and offshore domiciles and to counter risks medium and long term competitiveness of the UK as a location for the insurance business.
The Panel also finds that the consultation process surrounding the tax changes should be improved so as to understand the impact on consumers, industry and economy of the United Kingdom to make fiscal decisions.
Industry insurance is an important contributor to the UK tax take. In 2006-07 the insurance industry GBP9.7bn taxes contributed about 6% income tax corporation.
"While the UK continues to offer many advantages as an attractive place for insurers, it is important not to be complacent About this relative advantage, "says the report." The evidence is that companies continually review the overall competitiveness of the countries compared with elsewhere, including the attractiveness and relative complexity of the tax and regulatory regimes, and that businesses do not relocate when they believe will be in his favor. If competitors are moving, or setting up businesses elsewhere, companies will always have to assess their own position. Moreover, even if at first much of the insurance activity is taking place in the UK, redomiciling makes it more likely that the benefits of a subscription in the United Kingdom will be reviewed in the future. "
"In recent years the insurance industry has experienced a trend of redomiciling" The report will look. "This began in 2002 in the personal lines market, with a number of auto insurers such as Admiral and Zenith, the move to Gibraltar to take advantage of the capital and more favorable tax regime. More recently, a number of insurance companies high profile (Beazley and Brit Insurance in 2009, Zurich in 2008, Hardy 2007, Hiscox 2006) have also announced their intention to move its headquarters from the UK to redomicile in what they see as more favorable tax regimes. "
The report also pointed to the UK market historic struggle to compete with Bermuda for the new capital market after turning of catastrophic loss, as demonstrated after 9 / 11, and Hurricanes Katrina, Rita and Wilma in 2005 – a year that attracted Bermuda USD8.8bn compared approximately USD1.1bn received by Lloyd's of London, the report said.
Although the UK corporate tax rate is the lowest among the G7 economies at 28%, this rate is very attractive when compared with 0% of Bermuda corporation tax. The report also notes that competition for both the insurance capital elsewhere, including other European countries. Moreover, the development of new financial centers such as Qatar and Dubai as well as the larger centers emerging, such as Shanghai and Singapore, present opportunities for insurers in the UK, but also greater competition for the new capital in the next decade.
"This underscores the need to maintain competitiveness in consideration to improve the medium to long term strength of both the insurance industry in the United Kingdom and the United Kingdom economy, "the report said." Stability, predictability and competitiveness of the tax and regulatory including the relative cost of compliance will be an important part of this. "
The Panel's report also recommended that the government must also trying to maintain "stability and certainty and complexity" in the taxation of savings and pensions. "This will benefit consumers, because it will simplify decision making and allows them to plan more effectively. "
In addition, the Panel finds that thought must be given by the government for "well designed incentives" to help ensure that people buy the savings and protection they need to cover and help to promote personal responsibility. The report also recommends that the Government will maintain the existing incentives, including tax relief on pensions, and explore new options, while acknowledging these should be balanced against affordability.
For more information, visit OCRA worldwide www.ocra.com
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