Commitment to build on the UK's position as world leader in the global insurance market

By Colin Graham, UK Insurance Tax Leader

Perhaps of most interest today to the insurance sector is a commitment in the Autumn Statement to build on the UK’s position as a world leader in the global insurance market and to explore options to ensure that the UK’s regulatory and tax regime is as competitive as possible to attract more reinsurance business to the UK. There will be a report on interim findings in Budget 2015.  This is an exciting development coming so shortly after the issue of the report by the London Market Group in November on London’s competitive positioning.

The Chancellor today emphasised commitment to leading the way in the G20 and OECD negotiations on reform to international tax rules He announced a new 25% diverted profits tax on businesses that are seen as artificially avoiding UK tax by shifting profits overseas. He has also announced consultation on measures recommended by the OECD as part of the Base Erosion and Profit Shifting ('BEPS') project including country-by-country tax reporting and tackling tax avoidance using hybrid instruments.

Insurance, particularly the London market, is a global business and it is important that the Chancellor ensures the UK remains the most competitive place in the G20 to do business.

Equally, it is important that the new rules don’t create uncertainty for business.  We are yet to see the detailed measures proposed.