October 20, 2019

October 18, 2019

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Budgeting for Employee Healthcare Costs in the UK

We anticipate that the significant increase in insurance premium tax that was announced in the UK Summer Budget on 8 July will encourage many more employers to explore corporate healthcare trusts. IPT will increase from 6% to 9.5% from November 2015. This will apply to employee health insurance policies like all other UK insurance products. Corporate healthcare trusts are a way of providing healthcare benefits to employees other than through insurance. Instead of paying premiums to an insurer, the employer pays cash into a trust for the benefit of its employees. The trustees then pay for medical treatment or reimburse employees for medical expenses which have been incurred. As the tax saving that these structures generate is to increase by more than 50%, it might be music to the ears of the FD!

On the other hand, if employee health insurance is provided through a flexible benefits package, it may now be subject to increased HMRC scrutiny as a result of the review of salary sacrifice arrangements also announced as part of the Budget.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Matthew Giles Pension Attorney Squire Patton Boggs Law Firm
Partner

Matthew Giles is an attorney who leads Squire Patton Boggs' team of Pensions lawyers in Birmingham. The wider Pensions team was named Human Resources (Specialism) Firm of the Year 2018 at The Legal 500 UK Awards.

He is a former finalist at the British Legal Awards. He is regarded as a "Leading Individual" in Pensions by The Legal 500 UKChambers UK reports that he has a “practical, no-nonsense approach.”

Matthew specialises in advising on defined benefit pension plans, focussing on a range of deficit...

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