Feb 2010:
The Association of British Insurers (ABI), the main lobby group for the UK insurance industry, says firms are likely to relocate offshore in response to high taxes.
Offshore financial centres are likely to become popular destinations for office relocations and company registrations from insurers, claims the ABI. Its director of financial regulation, Peter Vipond, says, "the real danger for UK plc is insurers deciding to locate away from the UK."
He warns the UK government that firms will simply leave the UK for cheaper countries, "the UK cannot afford to stand still as other centres become more attractive."
Last year, two major British insurers, Beazley and Brit Insurance, relocated offshore to friendlier tax environments. Brit Insurance says that its move will effectively halve its tax bill for this year.
It is not just high corporation tax levels that are driving firms abroad, but also the rise in personal tax burdens on company executives. This follows the introduction of a 50 per cent higher-earner tax level and a 50 per cent tax on banking bonuses totaling over £25,000.
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