Looking after the people in your team goes beyond healthcare. In today’s society, it’s also about supporting their families if the worst happens or ensuring they still have an income if they’re unable to work. Thankfully though, there are a few tax-efficient ways you can do this.

Group death in service

This policy provides a tax-free lump sum to an employee’s family if they die while employed by your business. For employees, it doesn’t necessarily count as a benefit in kind, so it doesn’t reduce their personal allowance. 

For you and your company, however, these premiums are fully deductible against profits making it a fantastic offering and one that is often looked highly upon by individuals considering joining. 

Relevant life policy

Designed for those smaller businesses that don’t have a group scheme, this cover protects employees and directors. Again, there’s no taxable benefit for employees and the payout is typically written into trust. This means it doesn’t form part of their estate and is therefore safe from Inheritance Tax.

For the company offering this type of cover, premiums again qualify as a business expense meaning you can offset them from taxable profits. 

Income protection

If an employee is unable to work due to an accident, injury or long-term illness, this insurance will provide an ongoing income to them. For employees, this isn’t classed as a benefit in kind at the time premiums are paid. If a claim is made, payments are processed through payroll and taxed as normal income. 

Just like other insurance types, income protection premiums are tax-deductible for the company meaning it’s a great investment for those interested. 

The bottom line

Ultimately, these benefits are often perceived to be some of the most highly valued by employees. Not just that but it demonstrates a supportive and caring work environment, again something that is highly regarded, and they’re structured in a way that’s efficient for the business and fair for the staff. As Kathryn Hargreaves from IN Accountancy explains, “providing tax-free benefits are a great way to save corporation tax without creating a tax liability for employees.”

Don’t worry if you’re not sure which option is right for your business as MOORE Health & Protection Ltd can help design a protection package that works for your team and tax bill. Get in touch for tailored advice.

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.