The UK government has announced plans to boost the insurance industry with perks including tax breaks as it looks to increase growth.
It is hoped that providing tax breaks will prevent insurance companies from using tax-havens such as the Cayman Islands and Luxembourg.
According to the Association of British Insurers, the sector already provides around £10.4 billion in tax contributions to the public fund – but believes this will increase if large corporations are given incentives to repatriate functions to the UK.
Greg Clark, a treasury minister, told a conference run by Insurance Day: “The government recognises that the insurance industry is a key asset for this country and is determined to maintain and sharpen the sector’s competitive edge.”
Increasing media scrutiny of large firms’ tax regimes, including those of Google and Starbucks, have caused nervousness among many corporations who reduce their liability by funneling transactions through low-tax countries.
Previously, in chancellor George Osborne’s March budget, it was announced that similar measures would be introduced to reduce taxes on trades in small company shares.