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Example:. Cost to Ali as a Director paying personally Monthly premium = £200.00 Pre-tax Income to fund £200 at Income Tax rate of 40%* and National Insurance at 2%* = £344.83 Cost with employers National Insurance Contributions at 13.8% on this salary = £392.41
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Example: Cost to Ali as a Director paying personally Monthly premium = £200.00 Pre-tax Income to fund £200 at Income Tax rate of 40%* and National Insurance at 2%* = £344.83 Cost with employers National Insurance Contributions at 13.8% on this salary = £392.41 Gross Salary and National Insurance are allowable deductions against Corporation Tax at 20%* Total monthly cost to Ali and LBD Ltd Company = £313.93 Ali Ramat a shareholding director currently pays £200 a month for his life assurance. Figures based on HMRC Tax and NI rates applicable as at 06.04.2011 1
Example: continued LBD Ltd pays premiums through a relevant life plan Monthly premium = £200.00 No employee Income Tax or National Insurance No employer National Insurance Relevant life policy is an allowable deduction against corporation tax at 20%* Total Cost to LBD Ltd Company = £160.00 Cost to Ali and LBD Ltd company paying personally = £313.93 Cost to LBD Ltd Company paying through RLPT = £160.00 Saving = £ 153.93 or 49% Figures based on HMRC Tax and NI rates applicable as at 06.04.2011 2
