Government Collects Third Highest Amount Of Corporate Tax From UK Insurance Sector

Tue, 09 Oct 2007

British insurance companies have contributed £5.5 billion in government tax, new research by the Association of British Insurers has revealed.

The first of its kind survey found that insurers in the UK paid £3.1 billion in taxes for 2006-2007, ranking it as the third-highest amount of corporation tax of any market sector.

Additionally, insurance companies in Britian also collected an additional £3.4 billion in tax on behalf of the government through taxes such as employee National Insurance (NI), PAYE and Insurance Premium Tax (IPT).

The study, an in-depth analysis of the insurance industry’s contribution to the Treasury, took into account all direct and indirect taxes, along with employment and environmental taxes .

The ABI’s director of financial regulation and taxation, Peter Vipond, said the data reflected how large and successful Britain’s insurance sector is.

"We hope that the government keeps working with insurers to improve the tax system so that this dynamic sector can operate successfully, both within the UK and globally," commented Vipond.

Insurers currently face a range of tax issues such as the operation of taxation for life insurance, an EU VAT review, the tax treatment of annuities and the taxation of foreign profits .

The data revealed that UK insurers pay out over £160 million per day in pension and life insurance benefits, as well as a further £57 million a day in general insurance claims .
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