Enquiry may be justified where a financial (re)insurance contract is accounted for on the basis that premiums and claims are revenue items, and the effect of this accounting treatment is to defer the recognition of profit, but there is no significant transfer of underwriting risk. High risk cases will in general be those where the UK company is the cedant under a reinsurance contract to a reinsurer in a tax haven. Significant resource input may be needed to establish the facts before the technical arguments can begin.

Depending on the particular facts, suitable arguments are likely to include:

Reported profit is not in accordance with the relevant accounting standards.

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