Whose policies?

Premiums paid by employer on insurance policies for director

The taxpayers were the employer MMCL and the sole director M. The employer paid the premiums on various insurance policies for M. HMRC said tax and National Insurance was due on the payments and issued assessments. The taxpayers appealed saying the policies should have been taken out in the name of the company and when they realised they were not the policies were assigned from M to MMCL.

The issue for the First-tier Tribunal was whether the premiums should be treated as earnings from M’s employment with MMCL.

The tribunal noted that ITEPA 2003 s 62 defines earnings as ‘any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth’. It found that the company had not tried to recover the premiums from the...