What are the tax implications of the other employee benefits?
PRIVATE HEALTHCARE AND CRITICAL ILLNESS COVER Employer – premiums are normally deductible as a business expense Employee – premiums are treated as a P11D benefit, in other words the cost of the premium is added to the individual’s taxable income. For example, if the annual cost for an individual is 500 then, for a basic rate tax payer, extra tax of 110 would be payable. A higher rate tax payer would pay 200 extra in tax for the same level of benefit. INCAPACITY COVER (also known as Permanent Health Insurance) Employer – if the employer sets up a policy for an employee to facilitate the continuation of the individual’s salary if they become ill or disabled for a time, then premiums are normally deductible as a business expense. Employee – there is no P11D implication. If an individual starts to claim, then they will be taxed on the income received in the normal way. LIFE COVER (also known as death in service cover) Employer – premiums paid by the employer into an approved group life cov
