Integra News How to put life cover on expenses
Can I put it on expenses? Is it tax deductible? Perhaps the most commonly asked questions by business owners. And why not? We could be talking about substantial savings to a business vs having to pay corporation tax at 19% (and set to rise over the coming years).
Pay half the normal premiums
When talking about a directors life insurance it’s more likely that the saving is closer to 50%! That’s because for the director to pay for it from taxed income there are also employers national insurance contributions, PAYE income tax and employee national insurance contributions to be factored in.
Relevant Life Plans
This type of life insurance can be paid for by any UK company for any employee. The incentive comes from there being no corporation tax liability on the firm and no personal tax liability for the employee. That means unlike a company car benefit, this is not a “benefit in kind” and so it is not recorded on your P11D and it doesn’t affect your tax code.
It provides a “death in service” type benefit often seen available if you work for a larger company that has a group life insurance scheme. The idea being it leaves behind a lump sum for the family of the deceased to cope without the income they would otherwise have continued to see enter the household. For that reason, it is usually taken as a multiple of the employee’s total remuneration.
Not just for directors
This type of life cover can also be used to provide “employee benefits” to any employee of the company, not just shareholders. It can therefore be a powerful tool in making it clear how much you value the important members of your organisation.
Not just life cover
The beauty of providing your employees with life cover in this way is that they (and you) get so much more than a lump sum in the event of death. That’s because the life companies have been adding in extra services for policyholders that can add real value to both the employee and the business. For example.....
See your GP without waiting
More than one of the major insurers bundle in the ability to book an appointment with a GP 24 hours a day, 7 days a week. That is is pretty nice perk to make available to your staff. Trying to get a regular GP appointment is a real hassle and so letting your employees breeze past and get appointment easily is a first class benefit.
The business gets a happy employee, who feels valued and is likely to spend less time off work by having their needs met more quickly and effectively. Great news all round!
A dedicated nurse
Suppose a member of your staff experiences injury, a serious illness or bereavement. If you had given them life cover through a relevant life plan, they could have access to a dedicated nurse who would setup a tailored plan and provide personal support for as long as they need it. Their partner, spouse and children could use that facility too!
These are just a couple of the added benefits insurers are making available to plan holders today. There are many more. You could even use this as a way to your “employee benefits programme”.
Take action today
Talk to Integra and protect your most valuable resource, your people. They’ll love you for it!
Written by Gavin Culverhouse
Phone: 0117 251 0083 (option 2)