The government has announced plans to simplify the tax treatment of general insurance reserves.
In his Pre-Budget report, Gordon Brown highlighted plans to introduced legislation to repeal the current complex taxation rules and replace them with a narrowly targeted revenue protection measure. The report stated that consultation will continue to finalise the scope of the legislative changes.
Commenting on the announcement, Rob Gill, head of general insurance tax at KPMG said: “Today the Chancellor announced changes to the way general insurers are taxed, particularly the amounts that they set aside to pay claims.
“This should be good news for general insurers as the old rules imposed a heavy compliance burden but the Revenue has yet to announce details of the replacement regime. It is important that these do not lead to time consuming correspondence between insurance companies and the Revenue.”
