Indemnity Insurance - Government acts to close a tax loophole
Written by Ian Congreave - Filed under: Indemnity Insurance on January 26th, 2009 | No Comments »
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If an employer pays an employee’s liabilities arising out of legal action or provides indemnity insurance against such liabilities, the employer’s costs are a taxable benefit to the employee and must be reported on form P11D. However, where the liability arises out of the employment, for example, because the employee is obliged to pay it as holder of the employment, the employee may make a business deduction claim to offset some or all of the tax charge arising from the benefit being reported on form P11D (unless they arise in respect of criminal acts). These provisions are to be found in sections 346 to 348 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and, in respect of employees who have left the employment, in sections 555 to 559.
Posted January 26th, 2009 | No Comments »
