"What expenses are allowable in my Limited Company?"
This is perhaps one of the most frequently asked client questions, and understandably so. The tax burden of owning and operating a limited company is getting heavier. With Corporation Tax rates set to increase as well as tax on profit extraction (i.e Dividends) increasing next year, now is the time for owner managed limited companies to start taking stock of what expenses a company can claim for to offset against corporation tax, and the personal tax implications of any benefit in kind.
We're going to periodically look at different types of expenses in this series, including what is allowable, as well as why certain expenses are not allowable. We'll also be introducing you to some of our associates who can help in each particular field.
As always, these articles are for information only and do not constitute formal advice - should you wish for detailed, specific guidance, please contact us directly to discuss your circumstances.
Whether you are a director owned and operated company, or whether your company has staff, there are several costs which can be met by the company on behalf of it's employees, which are allowable expenses in the Company Accounts, although you should be aware that some of these may attract a Personal Tax liability through Benefit in Kind. As such there is a balance to strike.
One such area many companies pay for is private health insurance.
We work closely with Paul Mills at Premier Choice Healthcare who writes,
" All business owners should not only insure their premises, their Company cars, vans etc but themselves & their family members !
The NHS are doing a marvelous job of vaccinating over 80% of the UK population, however this has took its tole as currently there are 5.4 million people on the NHS waiting lists which are increasing every month.
By taking out Private medical insurance medical issues can be resolved very quickly & you can pick to see a Specialist at a time that suits you & the business, say over a weekend or evening time. All insurers are now offering a PRIVATE GP Service where you can be seen via a video-call within a few hours. Then if you need to see a Specialist & have diagnostic tests & Scans, this can take place within a few days, followed by surgery/physiotherapy to get you back to work QUICKLY
The business can pay the premiums & the KEY people get the right treatment at a time that suits the Individual & the business."
So as Paul writes there are clearly benefits to considering paying for such a service through the company, with the added benefit that the cost of the policy can be offset against corporation tax. However Private Medical Insurance does attract a benefit in Kind tax charge on the individual and so this implication should be considered before proceeding - A rough guide from HMRC on benefit in kind charges can be found here https://www.gov.uk/expenses-and-benefits-medical-treatment