Is life insurance an allowable expense?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT member discussion
I did the 2004/05 tax return for a driving instructor last year who said that her previous accountant had always claimed her life insurance payments. The insurance would pay out if she was unable to work due to sickness/accident, but I can't see how this can be business expenditure, so I didn't include it.
I've just had another client bring his books round and he was also told he could claim it too - am I missing something?!!

jodie

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Is life insurance an allowable expense?

    Does it depend on the beneficiary? If the company receives the cash that would be fine, but if it went to their family etc. that may be different.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Is life insurance an allowable expense?

    Now that you've said that it's ringing some bells in the back of my head, I remember coming accross this in the ATT text book, but I can't find it now.

    My clients are both just sole traders, not companies, so any cash received would just go to them - do you think that would be allowable?

    thanks
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Is life insurance an allowable expense?

    Don't know. If they were limited, it would go into the company kitty to clear liabilities.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Is life insurance an allowable expense?

    The gneral rule is that if they claim the premiums, then when it pays out it is included as business income.......
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Is life insurance an allowable expense?

    I've just managed to find this: http://www.hmrc.gov.uk/manuals/bimmanual/BIM45560.htm

    so it looks like they're not allowable after all :?

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