Tax on Company Medical Insurance

danjourno

Hi,

Its time to renew my families medical insurance.

I'm a company director so i'm looking at company policies to see if it can save money.

Question, how does it work with tax? The quotes are £104.16 per month, so does that mean that the company pays £104.16 and I have to pay £20.83 per month. So the total cost is £125?

Apart from the chance of lower premiums, is there any other benefit to company medical insurance if i'm the director of the company?

Thanks
Dan

Xutl

danjourno wrote: »

Hi,

Its time to renew my families medical insurance.

I'm a company director so i'm looking at company policies to see if it can save money.

Question, how does it work with tax? The quotes are £104.16 per month, so does that mean that the company pays £104.16 and I have to pay £20.83 per month. So the total cost is £125?

Apart from the chance of lower premiums, is there any other benefit to company medical insurance if i'm the director of the company?

Thanks
Dan

sounds about right as long as you're a basic rate (20%) tax payer.

jimmo

danjourno wrote: »

Question, how does it work with tax? The quotes are £104.16 per month, so does that mean that the company pays £104.16 and I have to pay £20.83 per month. So the total cost is £125?

Not quite.

The £104.16 that the company pays to the insurance provider is deductible as a part of the cost of employing you thus reducing the taxable profits.

So the net cost to the company will be £104.16 less corporation tax.

roger_c

Plus the cost of 13.8% Class 1A NIC on the cost of the insurance, less corporation tax relief!

antrobus

danjourno wrote: »

...Apart from the chance of lower premiums, is there any other benefit to company medical insurance if i'm the director of the company?...

No. The last time I worked this out, it made absolutely no difference whether the premiums were paid personally or by the company.

jimmo wrote: »

...The £104.16 that the company pays to the insurance provider is deductible as a part of the cost of employing you thus reducing the taxable profits. ....

Don't forget that any salary that the company pays the individual to enable them to pay the premium themselves is also tax deductible.