10/01/2021 | News release | Distributed by Public on 10/01/2021 03:04
Five-point plan to stimulate growth and ease the squeeze
In its Budget submission, the Association of British Insurers (ABI) sets out how the insurance and long-term savings industry can work constructively with the Government to deliver on its 'levelling up' agenda, boost global
competitiveness, unlock infrastructure investment, support the transition to net zero, and strengthen the financial resilience of households and businesses across the UK.
The insurance and long-term savings sector is the largest in Europe and fourth largest in the world, adding £29.1 billion a year to the UK economy, managing investments of nearly £1.7trillion, and paying over £16 billion in taxes.
Summary of the submission
Compete to succeed: In post Brexit Britain the Government has a chance to grasp the nettle of reform and create a complementary tax and regulatory framework that drives competitiveness, attracts overseas capital and promotes the UK as a place to invest, innovate and inspire. The implementation of new global tax rules must not lead to UK insurers incurring a multi-hundred-million-pound tax bill in a year simply because of differences in the timing of the recognition of income and expense under financial accounting and tax accounting rules.
Huw Evans, the ABI's Director General, said:
"The UK's world-leading insurance and long-term savings sector has a crucial role to play in boosting our global competitiveness post-Brexit while strengthening the financial resilience of millions of households and businesses who reply on insurance protection.
"Determined reform of financial services regulation inherited from the EU could unlock nearly one trillion pounds over 15 years that could be invested in the UK's transition to net zero. It is critical that this potential is not diluted by increases in corporate taxes, either as a result of global agreements or domestic drivers.
"Freezing the rate of Insurance Premium Tax, a tax that hits the poorest the hardest, maintaining adequate investment in flood defence infrastructure, and simplifying pensions tax relief to encourage greater saving would all help this Budget and Spending Review lay good foundations for the country's recovery from the impacts of Covid-19, and enable our sector to play its fullest part in support."
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