A lot of people are put off contracting due to the lack of “security” such as sick pay. It is possible to take out Income Protection although this will always be based on your salary and dividends rather than your day rate. It will have to be paid through your personal account and this added expense will reduce your disposable income.
Life cover is something that you need to take out if you have a mortgage and something that you will want to have in place if you have dependants. You will pay this by monthly or annual premium from your personal account for the majority of your life.
What if you could enjoy the benefit and security of these products that you are currently paying from your personal accounts by expensing them through your business, which will ultimately reduce the corporation tax that you have to pay?
Executive Personal Health Insurance (PHI)
- What is it? This is designed to fund pension contributions if an executive is unable to work due to sickness or accident.
- Why is that relevant? Due to the nature of the protection it is an allowable business expense and therefore can be paid through the business.
- But I don’t have any executives, I’m the sole Director – Although the insurance is designed to fund pension contributions, what you do with the benefits is another matter. They will simply be paid into the business account and then they can be used at the discretion of the Company Director.
- So this is effectively income protection that can be paid through the company? Exactly, although the intention at the time of taking it out should be to cover pension contributions.
Death in Service
- What is it? This is designed to pay out in the event of your death.
- Why is that relevant? It is an allowable business expense and therefore can be paid through the business.
- So this is effectively life cover that can be paid through the company? Exactly, and it will be setup under a Discretionary Trust to pass on to the nominated required beneficiary, tax free.
All you need to do is complete the following form and somebody will be in touch to help provide you with some valuable protection and save you money at the same time: