One of the most prominent players in the Lloyd’s insurance market is considering shifting its corporate headquarters outside the UK, the latest in a string of City businesses angered by unpopular tax proposals from the Treasury. Brit Insurance, the reinsurance broker valued at £800 million in London, is investigating whether jurisdictions such as Dublin or Geneva are more tax-efficient than the UK, which is increasingly seen as operating a business-unfriendly regime.

Several other companies, including Sir Martin Sorrell’s WPP Group, have said they are considering such a move, in reaction to plans to increase the amount of tax firms pay on overseas earnings. For its part the Treasury is concerned that some corporates may be manipulating what they earn at home and overseas to cut their tax bills.

David Illingworth, chief executive of Smith & Nephew, the medical devices group, told The Times last week: “We are concerned and like other companies are keeping it under review.” He said his company would not rule out moving abroad.

Several companies have said they would do that, including Shire Pharmaceuticals and United Business Media. The issue threatens Gordon Brown with a third possible revolt by business over tax, after the rows over nondoms and changes to capital gains tax.

A delegation of chairmen from some of Britain’s biggest companies, including HSBC, Vodafone and BP, last month delivered a warning to Downing Street that Britain faced a corporate exodus if the proposals over foreign earnings went ahead.

Dane Douetil, Brit’s chief executive, told The Times that his company was considering its position as a direct result of high UK corporation taxes, currently 28 per cent. He said his company was hugely frustrated at the lack of certainty from the Treasury about the proposals on foreign profits, which are at the consultation stage.

Mr Douetil said: “I have worked hard on staying in the UK. Brit is domiciled here. We want to remain, but can only stay if we have greater certainty about our tax position. We are looking closer than ever at other possibilities.”

Mr Douetil has been lobbying the Government for years about tax issues on behalf of the whole of the Lloyd’s insurance market. Although he emphasised that he was speaking solely as chief executive of Brit, his words will find an echo across the market.

Ewen Gilmour, chief executive of Chaucer, another Lloyd’s underwriter, said: “For an insurance group that derives a large proportion of its business from overseas, it is relatively easy to export the holding company domicile.

“A number of our peer group have done this and we are coming under pressure from our shareholders. However, we would rather pay 20 per cent corporation tax to the UK Government than 12.5 per cent to the Irish Government. Many of us think the Government would collect more corporation tax by cutting it to 20 per cent than by maintaining the 28 per cent level.”

Mr Douetil said that the Treasury appeared to have ignored his concerns and that over the past several months he had detected even less concern about planning for the medium and long term to protect the UK’s reputation as an attractive business centre.

He acknowledged that during his lobbying he had been approached on many occasions by Lloyd’s companies considering their tax position. “I know that this concern is shared by others,” he said. Brit’s position, and other threats to move domiciles, illustrates the growing anger among British companies about their tax treatment at the hands of the Labour Government.

In the Lloyd’s market alone, companies accounting for £8.5 billion of written insurance premiums have relocated their headquarters, often to Bermuda, since 1999. They include Hardy Underwriting, Talbot, Kiln, Omega and Catlin. Mr Douetil, whose firm wrote £1.3 billion of insurance premiums and made £192 million of pretax profits last year, said he was worried that short-term Treasury thinking meant that the “intellectual gravity” of the Lloyd’s market was moving away from the UK and towards Bermuda.

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