As a business owner, you need to be aware of the potential risks that can threaten your company’s survival. Think key person issues, outstanding debts and shareholder disputes to name a few. Thankfully, there are several tax-efficient ways you can safeguard your business in the 21st century and they have more than one benefit for your business’ bottom line. 

Key person insurance 

This type of insurance protects your business against the financial impact of losing a director or key employee in the event of illness or death. Insurance premiums are typically tax-deductible, but only if they’re structured to protect business profits. Any payouts will go directly to the company and can be used to help with loss of revenue or additional hiring costs. 

Shareholder and partnership protection

Under this policy, funds become available if a shareholder or partner dies or becomes critically ill. The money must be used to buy out their share of the business. Typically, this cover is set up with the payout paid into a trust meaning it is kept outside of the deceased’s estate. If properly structured, the business can even deduct the insurance premiums from any profits. 

Business loan protection

If you’ve taken out a business loan, this insurance will repay the existing balance if a key person dies. Again, for the business, premiums are deductible, and the payout means that your company won’t be crippled by any outstanding debts.

Protect your business today

Without these policies in place, the illness or death of a key person could leave your business open to risk and struggling to survive, financially and operationally. What’s more, by using the right structures and trusts, these types of cover can ensure your business is protected while providing significant tax relief. 

Remember though every business is different and so are its risks as Kathryn Hargreaves from IN Accountancy advises. “Tax implications on business protection do vary so it is imperative to get advice before taking out a policy.” This is where MOORE Health & Protection Ltd comes in so why not get in touch today to make sure you’re protected against the unexpected, in the most tax-efficient way.

MOORE Health & Protection Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales no. 15020771. Registered Address: 17 Eyam Road, Hazel Grove, Stockport SK7 6HP.