Insurers who moved to Bermuda from the UK in recent years will be among the companies facing greater scrutiny from the British tax authorities.

A senior UK taxation official has warned that all corporate tax exiles to have left Britain must be able to prove that senior management decisions are being made outside the UK.

Companies who fail to prove that — even if it is several years since they relocated — could be subject to investigation and litigation at the hands of the British revenue authorities.

The permanent secretary for tax at the HM Revenue and Customs (HMRC), Dave Hartnett, said this week that even if meetings are held outside Britain among non-resident directors, a company could be deemed to be UK-resident if evidence, possibly including e-mails and note of phone calls, suggest that key decisions are in fact being made from the UK.

"Some companies claim to have changed their residence and left the UK," Mr. Hartnett told The Financial Times. "Investigation and litigation in the UK will establish that."

Several major players in the Lloyd's of London insurance market have moved their headquarters to Bermuda, which has a corporate tax rate of zero, in recent years.

These include Catlin, Hiscox, Lancashire Holdings and Hardy Underwriting, all of which have underwriting operating platforms on the Island.

Analyst Ben Cohen, at London broker Collins Stewart, believes there are varying levels of risk attached to the shares of such companies.

In a research note, Mr. Cohen said the top managers of Catlin and Hiscox reside in the UK, but they have not pushed for tax cuts as aggressively as other insurers. This makes them only "medium risk", he said.

Lancashire is incorporated in Bermuda but senior bosses live on the island, Mr. Cohen added, making it "low risk". Amlin, which has an underwriting unit in Bermuda, but is still domiciled in the UK, is also classed as "low risk".

The analyst sounded alarm bells over Brit and Beazley, labelling their stock "higher risk".

Beazley moved its incorporation to Jersey and its tax residence to Ireland – which is expected to slash its tax bill by around 16 percent - which puts it in the firing line.

Brit, which opted to move its domicile to Netherlands, rather than Bermuda, is also likely to be closely watched.