Are you a director?
Do you have life insurance cover to protect your family when you are gone?
If so, you could be paying too much tax.
Or, would you like to provide life cover to your employees as a benefit in a tax efficient way?
A solution exists for life insurance that is both tax deductible for the company and a benefit to the employee.
This solution can:
- Save you tax and national insurance
- Has no benefit in kind charges
- Has no effect on pension and inheritance tax allowances
Here is a table showing the difference between paying the premium through the company and personally.
|How can the policy save tax?|
|Figures based on an increase on £50,000 base salary for the 2014/2015 tax year.|
|Standard lifecover||Tax-efficient lifecover|
|Company gross cost||Employee’s National Insurance contribution||£34||-|
|Income tax @ 40%||£690||-|
|Employer’s National Insurance contributions||£238||-|
|Total gross cost||£1,962||£1,000|
|Company tax saving||Corporation tax relief at 20%||£392||£200|
|Net cost to the company||£1,570||£800|
These plans are very useful for businesses that do not have enough eligible employees to warrant a group life scheme and also for high earning employees and directors who may or may not have substantial pension funds and do not want their death-in-service benefits to form part of their Lifetime Allowance.
Some people just want a tax efficient way of paying for their life cover through the company.
Why pay for your life insurance personally premiums from after tax money, when it can be paid for by the company, saving you tax and with no benefit in kind charges?