The UK insurance industry made a “total contribution of £10.4 billion to the Exchequer – which would cover the entire £10.2 billion [$16.9 billion] Home Office budget. Insurance companies in the Hundred Group paid the third highest corporation tax of any sector”, observed a report by the Association of British Insurers (ABI).
The report, prepared jointly with PricewaterhouseCoopers (PwC), also found that British insurers paid 6.4 per cent of the total Government tax receipts amounting to £2.7 billion. Tax receipts jumped by a whopping 50 per cent over 2009.
The third highest corporation tax of any sector was paid by the insurance companies of the Hundred Group.
“The tax paid by the UK insurance industry could pay for the whole of the Home Office budget, or fund the budgets of the Departments for Transport, Communities and the Foreign Office put together. Insurers are crucial to the economy. Our total tax contribution is now higher than it was before the recession showing the important role the insurance industry is playing in the recovery and how resilient the industry is during tough times,” said Otto Thoresen, director general of ABI.
“These figures highlight the importance of consistent, competitive tax rules which could help the industry to grow further so that it can continue to make an important contribution to the UK coffers,” he continued. “We are talking to the Government about how to make the UK tax system an asset for the UK when it comes to retaining and attracting insurers to the UK. It is important we encourage our good, successful UK businesses to expand and grow rather than having rules which make the UK a less attractive place to base a business,” he added.
UK insurers are “major contributors to the UK economy and crucial to its future growth,” the report observed. The wider insurance industry employs 275,000 people and is one of the biggest private employers in the country. 152,000 people are directly employed by ABI member companies who collectively pay employment taxes worth £2.64 billion, the report observed.