Hi,
One of my clients offers Private Medical Insurance to players in their professional sportsteam. They have been told that premiums are always subject to BIK tax. Now there are a couple of issues that I have with this. The first is HMRC’s own reference to duality of purpose. The vast majority of claims relate to injuries sustained during playing or training so the marginal beenfit to the player is effectively zero and there is a particular case quoted relating to a stunt man that allows medical expenses as tax deductible. There are no insurances on the market that will cover sport injuries only so the personal benefit to the player is truly unavoidable and incidental.
Does anyone have any experience of this issue?
KFK
Replies (13)
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I know it’s the standard answer but:
Yep. They're benefits in kind.
I don't understand how an insurer would insure professional rugby players for sporting injuries. Presumably the premiums are absolutely eye-watering.
Would the client be any worse off if they self insured for sporting injuries? Pay for treatment for sports injuries and no BIK.
<Thanks for hanging in there with me though lion
Well, I have a personal interest.
I'm aware of a couple of cases which have gone with the taxpayer but they were extreme and you'll probably need to go to FTT to argue your point on the facts of your own case.
You're probably better paying as you go for the medical stuff in the long term but any costs for operations or other procedures will still be taxed on the employee as a BIK.
Your best route is to argue that it's an industrial accident.
causing the club major issues with their players.
What do other clubs do? Has the league/association lobbied for a change in policy with HMRC?
If everyone is in the same boat then the players have nothing to complain about. If your club has tried to follow its own rules and is now feeling exposed, then it will have to take the consequences and either increase its players pay or pay for treatment directly for any sporting injuries (possibly?)
I'm always interested in outcomes.
You won't win this with the Inspector - unless it's trivial. You'll need to go to FTT.
Out of interest, doesn't a professional rugby club have its own physios, nutritionist and access to medical facilities?
Seems odd to have each player's choice of doctor deciding on treatment...
I think others have covered the BIK angle. Pay as you go, has to be more tax effective in that respect.
The alternative, if you want to show the players you are serious about their health and well being, is to negotiate with HMRC to get the PMI onto the PAYE Settlement agreement and meet the benefit cost up front. Yes, it's expensive but aren't they worth it?