The Varney Review has been criticised by a leading insurance analyst for not tackling the thorny issue of the UK's prohibitive tax regime.

The Review of Links with Large Business, led by Sir David Varney, has been described as a "commonsense" document.

But Andrew Green, tax partner at financial adviser Mazars, told Insurance Times: "What it doesn't deal with is why companies want to set up in Europe and why companies should want to come to the UK rather than the likes of Ireland, Bermuda or Malta.

"By keeping corporation tax at 30%, we are at risk of losing that business."

The review does not pay specific attention to the financial service sector.

But Green insisted that as it accounted for such a significant proportion of corporation tax revenue, the government should ensure it properly embraced the financial sector and insurance.

Eight recommendations made by the Varney Review will be implemented by the Chancellor next year.

It has recommended that Revenue & Customs provides large businesses with increased and quicker assurances on the tax treatment of activities and business transactions.

Green said the document would hopefully provide more certainty for the insurance industry.