Statutory accounts vs supervisory profits

[Teodora Katsarova]

Hi all,
I'm looking at chapter 9, section 2, which states that since Jan 2013 trading profits for non-BLAGAB taxation are based on statutory accounts, whereas previously they were based on the supervisory returns. Could someone please clarify for me what the difference between the two is? I thought statutory accounts are submitted to the supervisor, i.e. that statutory accounts and supervisory returns are the same thing.
Also, what was the argument to move from the one basis to the other? Any insights would be much appreciated.
Many thanks in advance for your help!
t

 

[Mark Willder]

Hi all,
I'm looking at chapter 9, section 2, which states that since Jan 2013 trading profits for non-BLAGAB taxation are based on statutory accounts, whereas previously they were based on the supervisory returns. Could someone please clarify for me what the difference between the two is? I thought statutory accounts are submitted to the supervisor, i.e. that statutory accounts and supervisory returns are the same thing.
Also, what was the argument to move from the one basis to the other? Any insights would be much appreciated.
Many thanks in advance for your help!
t

Hi Teodora

Prior to 2013, the tax numbers were based on the Solvency I results given to the PRA.

However, the tax authorities knew that Solvency I was due to be withdrawn so they had to choose a new way to calculate the tax. They took the opportunity to start from scratch and decided that they would not use the Solvency II profit to calculate tax.

It was decided that from 2013, the profits from the report and accounts would be used to calculate the tax instead.

Good luck with your studies

Mark

 

[Teodora Katsarova]

Thanks, Mark, very helpful.