tax relief on heathcare scheme????

billy69_2

???
I have just taken out a health care sheme with insure-for-less.com, I have been assured by the salesman(who was very persisant) that the monthly premium would be tax deductable if I paid it from my business account, I am a self employed plasterer. He put it in writing quote 'Our understanding of the present revenue regulations is that contributions may qualify for corperation tax allowance'. Anyone out there that can tell me if this is right???? ???

dunstonh

It does seem to depend on the tax office.  

Mine goes through fine as a business expense as it is insuring the key income earner to the business.    

However, I have heard stories of some tax offices not allowing.   Guessing here but it may be linked to the justification for having it.   ie, taking it out to cover loss of income to repay the mortgage may not be sufficient for some tax offices as that isnt a business purpose.

Also, depending on your business classification, it may be treated as a benefit in kind if you do proceed with the business paying it.  

MJSW

I have been assured by the salesman(who was very persisant) that the monthly premium would be tax deductable if I paid it from my business account, I am a self employed plasterer.

In my opinion, you have been given some very questionable advice by the salesmann. Firstly, it is irrelevent where the money is taken from. The expense is either allowable or it isn't. Just because something is paid from the business account doesn't make it allowable.

He put it in writing quote 'Our understanding of the present revenue regulations is that contributions may qualify for corperation tax allowance'.

On this point he may well be techically correct, but if you are self employed, the availability of relief against Corporation Tax is completely irrelevent. In any event, if you were operating through a company then although the company would get relief for the premiums, you would be assessable on them personally as a benefit in kind.

From the Inland Revenue's Business Income manuals BIM45560: "Premiums paid by a sole trader or partner to provide life, accident or sickness insurance cover for him/herself or a partner are not allowable deductions in computing profits under Schedule D Case I or II. Such insurance policies are often known as permanent health insurance policies."