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UK Insurance Outsourcing Costs Set to Increase by 20%

by: Karen Cayamanda

Thursday, October 21, 2010 | Outsourcing News |

20% Iminent Increase for UK Insurance Outsourcing

UK and Irish insurance companies and those that provide intermediary/broking services are exempted from VAT, but under the new EU directive, they will soon face a 20 percent increase in costs on outsourcing business processes.

According to international VAT and IPT provider TMF, many companies have opted to outsource tasks such as claims handling and IT. “As a result, a supply industry has grown up which is divorced from the VAT-exempt insurance activity … has stretched the original scope of the exemption, and … has proved problematic to police.”

EU countries think that the popularity of the outsourcing industry poses a threat to jobs as it offers an option for companies to get things done offshore. TMF advised insurance companies to review their outsourcing strategy.


Source:
http://www.insurancedaily.co.uk

 

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