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bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 4201
Experience:  FCCA FCMA CGMA ACIS
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I have never found a definitive answer to whether payments

Customer Question

Hi I have never found a definitive answer to whether payments for group PHI, critical illness and death in service are taxable benefits on the employees? The employer makes the monthly payments so as far as I'm aware the scheme is in the employers name but with named employees included. Also what about executive income protection insurance for director and main employees, are these payments by the employer taxable on the employees too? Your help would be much appreciated with the P11d deadline looming fast!
Submitted: 2 years ago.
Category: UK Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
'Which' has the answer for you:
'Under a group IP policy, the insurance company pays your employer if you're unable to work. Your employer then pays you either your full salary or a pre-agreed proportion of it. Unlike individual income protection, though, group IP is taxable.'
Further information from the Gov UK web site indicates that [for employees]:
'You usually pay tax on the cost of the insurance premiums if your employer pays for your medical insurance.'
Thus for all the groups of employees, and remember company directors are employees per se, then these premiums constitute benefits in kind and must be taken into account in calculating the tax to be deducted from emoluments.
I do hope that my reply has been of some assistance.