The Association of British Insurers have said that they are preparing to make 'very strong representation' to the Government in the near future, over proposals that will force insurers to pay tax on their investment reserves.
In draft legislation, the Treasury and HM Revenue & Customs proposed that insurers would have to pay tax on their investment reserves to curb tax avoidance. Under Financial Services Authority rules, life insurers are obligated to meet capital requirements, and investment reserves are there to cover uncertainties. This is what the Government are intending to tax.
Our view
Insurers will have already suffered quite heavily at the hands of the tax man. Perhaps if Government did not have 40% of the population actually working for them i.e. 40% do not contribute towards wealth generation in the UK but are 'burdens' i.e. a drain on the wealth of this country.
This is not to knock what many valuable public servants do in the NHS, the Fire Service etc - it is the thousands of new 'jobs worth' jobs that have been created under Labour Government wasting more tax payers money and feeding the Labour tax machine.