Brit Insurance To Quit UK

Lack of competitive tax policy may prompt Brit Insurance to quit UK

The London underwriter, Brit Insurance would be taking a decision whether or not to move their tax headquarters from Britain in the next six months. This move by the Brit Insurance will have the Government on its toes to take steps to curb such departures by the corporates. The chief executive of Brit Insurance, Dane Douetil stated that the insurer has taken the subject very seriously for a more reasonable tax system like the one existing in Geneva or Dublin. According to him this move would be taken not only because of the tax factor but also on the fact where they are investing their capital on. In this respect, they are seeking advice of experts like that of an auditor, Ernst & Young and other consultants as well. Mr Douteil is also in charge of implementing modern practices on the biggest insurance market of the world.

This move by the company could have serious repercussions. It could also trigger other firms of Lloyd’s group to take such a similar move since most of them are frustrated with the Governments tax policies and unfriendly regulations towards British companies. Many companies including some high profile ones like WPP have threatened to take such a step. Pharmaceutical company GlaxoSmithKline could follow the lines of other drug groups like Shire and United Business Media. Business sectors especially those in insurance, pharmaceuticals and fund management are unhappy with tax issues like a common rate for capital gains tax, duty on non-British workers and the possibility of imposing tax on overseas profits. Until the uneconomical tax system is take care of by the Government with immediate effect, the country will witness more and more firms moving outside the UK.

The government has taken some steps to reduce tax and make it more corporate friendly. To stop firms against settling abroad, the Treasury has formed a high-level group of experts to explore various options to reduce the tax burden on the corporates. It has also decided not to add any new taxes without reaching a consensus with the companies in Britain. The pre-tax profits of Brit Insurance have been halved in the first six months to £49.9 million from £106.8 million. Brit has about £2 billion in store, partly to compensate for the liabilities that it has in its main business areas namely reinsurance, global markets, and the UK.

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