tax on insurance

sarahk4469

does anyone know if you receive an insurance payout is this taxable? I get a regular payment as off work sick but i was insured but am self employed so just wanted to check if anyone knew!

Thanks

Murdina

There is no straight answer with insurance - it depends on the exact facts. You mention you are self employed. It could be that the payout is taxable as part of the profits of your business - it depends exactly what the policy you took out says and what it was intended to cover.

If it was a policy like the one described in the link below and you were not getting any tax relief for the premiums then you should be able to rely on this HMRC guidance that it is not taxable:

http://www.hmrc.gov.uk/manuals/bimmanual/BIM45560.htm

sarahk4469

thanks for the answer, i'm still not too sure if its tax free or not do you have any advice on where to go for a definitive answer!

Thanks again

chrismac1

if you tell us what the policy was for and whether you claiimed the premiums paid as a business expense, we'll probably be able to give you a pretty definitive answer.