LONDON: One of Britain’s biggest services providers threatened on Friday to move jobs to India if the UK government pushed ahead with a plan to impose tax on insurance services from next year.

Liberata Financial Services, which provides intermediary insurance services to over 3 million policy holders, said implementing the VAT change would result in the loss of 10,000 outsourcing jobs in the UK, based on a recent study.

In a move to lobby the government, the company said it had planned to triple the size of its business over the next two to three years, but a tax change would force it to move jobs offshore to cut costs.

Liberata employs more than 1,000 people for clients including Barclays, AXA and Resolution.

HM Revenue & Customs (HMRC), the UK tax authority, plans to implement new rules on applying value-added tax (VAT) to insurance services from the start of 2006, but a consultation period ending today drew sharp criticism of its plans.

Insurers and outsourcing firms said HMRC should delay implementing the measure for at least a year or hold off introducing it until the European ruling is clearer.

The UK is implementing the VAT after the European Court of Justice ruled in March that some back-office activities outsourced by insurers were not exempt from VAT.

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