d2 Financial Solutions

Employee Benefit Protection

Businesses today operate in a much more competitive environment and are increasingly under pressure to perform. Recruitment and retention of good staff is essential to business growth and a fundamental issue for most employers.

No longer are annual salary and a company car the prime consideration for good quality staff. More and more, potential employees take account of the overall benefits package on offer, including Pensions, Healthcare and Life Assurance benefits.

A comprehensive benefits package can be a useful aid to staff recruitment and retention and in this respect, group life assurance cover, (also known as death in service cover), can be a valuable and cost effective component part of this package.

Group life assurance cover is usually designed to pay a lump sum benefit on the death of an employee of the sponsoring employer.

Suitable schemes can benefit from the following tax privileges: -

• Premiums paid for the scheme by the employer are treated as a trading expense for the purpose of corporation tax relief.
• The premiums paid by the employer are not treated as a taxable benefit on the employee and do not attract any additional National Insurance liability on either the employee or the employer.
• Lump sums paid on death will normally be free of any inheritance tax.