Life [***], Death in serv costs allow R&D?

These group life costs are not taxable BIK, Are these qualifying staff costs for R&D purposes?

Didn't find your answer?

These company pays substantial amounts for life cover/death in service.  Do they fall under excluded benefits S202 ITEPA 2003 and therefore qualify as staffing costs for R&D?  I can find narrative re benefit-in-kind and pension contributions, but nothing specific re life [***].

I have clarified with the client, that these are not considered reportable for P11d purposes.

Thanks

Replies (14)

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By DKB-Sheffield
17th Apr 2024 11:31

Not an answer but... seriously... Life A5$urance is censored?

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Replying to DKB-Sheffield:
stonks
By WinterDragon
17th Apr 2024 11:39

I'm assuming it was shortened to Life A$$.

I'd also guess 'life assurance' is fine when typed in full.

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Replying to WinterDragon:
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By DKB-Sheffield
17th Apr 2024 11:41

WinterDragon wrote:

I'm assuming it was shortened to Life A$$.

I'd also guess 'life assurance' is fine when typed in full.

Aha... makes sense.

And by you typing it in full - QED!

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Replying to DKB-Sheffield:
stonks
By WinterDragon
17th Apr 2024 11:44

I would have looked rather silly if I'd have got it wrong but I would have enjoyed bringing up the Scunthorpe problem...

https://en.wikipedia.org/wiki/Scunthorpe_problem

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Replying to WinterDragon:
RLI
By lionofludesch
17th Apr 2024 15:04

WinterDragon wrote:

I'm assuming it was shortened to Life A$$.

I'd also guess 'life assurance' is fine when typed in full.

These Americans are donkeys.

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By Tax Dragon
17th Apr 2024 11:55

Look at CTA 2009, not ITEPA.

Or ask the companies' accountant(s).

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By ATB
17th Apr 2024 12:26

I already did and CTA 09 does exclude benefit in kind and specifically includes pensions.
If Life [***]/Death in Service is not a BIK, then it would qualify for R&D. However I cannot find anything to substantiate that one way or the other. I have emailed Technical at HMRC but a reply may take weeks.

https://www.legislation.gov.uk/ukpga/2009/4/section/1123
(3) This subsection applies to an amount paid by the company to a director or an employee of the company, other than an amount paid in respect of benefits in kind, if—
(a)the amount is paid in respect of expenses paid by the director or employee, and
(b)the amount is paid because of the director's or employee's employment.

(7)This subsection applies to contributions paid by the company to a pension fund operated for the benefit of directors or employees of the company.
(8)In subsection (7) “pension fund” means a scheme, fund or other arrangement established and maintained (whether in the United Kingdom or elsewhere) for the purpose of providing pension benefits.For this purpose “scheme” includes a deed, agreement or series of agreements.
(9)In subsection (8) “pension benefits” means pensions, retirement annuities, allowances, lump sums, gratuities or other superannuation benefits (with or without subsidiary benefits).

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Replying to ATB:
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By Tax Dragon
17th Apr 2024 14:16

You read ss1? Which of 2 to 7 do you think this cost comes into?

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By Truthsayer
17th Apr 2024 12:41

The swear filter is making an [***] of itself again.

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Avalon Tax
By Avalon Tax
17th Apr 2024 13:41

Unlikely to be considered attributable expenditures for R&D related staffing costs as per sections 1123 and 1124 of CTA09. HMRC’s Corporate Intangibles Research and Development Manual explains at CIRD83200 that apart from pensions and Class 1 NIC, such allowable expenditures must be ‘emoluments’ paid by the company. If included in an R&D tax claim be prepared to defend in an HMRC R&D tax enquiry why the company considers that these costs were emoluments and also an allowable P&L deduction per BIM45525.

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By ATB
17th Apr 2024 14:31

I do not want to include it in an R&D claim if it is not right. HMRC refers to
'the emoluments paid by the company to its directors or employees including all salaries, wages, perquisites and profits whatsoever, other than benefits in kind, and'

Wouldn't the Life [***]/death in service be a perquisite. In the general term, we would say it is part of the remuneration package, a company benefit, but then if it is an excluded benefit and so not a benefit in kind, it would be allowable for R&D.

I have never seen it in an R&D claim so I immediately think, if it was allowed, we would know about it. However the client has included it in their costings I just cannot find an answer for sure

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Replying to ATB:
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By Tax Dragon
17th Apr 2024 20:23

I repeat my question. Which of subsections 2-7 of s1123 CTA 2009 would you consider that this might fall into?

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Replying to Tax Dragon:
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By FactChecker
17th Apr 2024 21:36

Horse: "no thanks, I don't want to be led to the water"

One might have hoped that ss 1039 to 1142B had been perused and digested before setting off on a potential claim - but s 1123 provides an excellent shortcut (and one that is remarkably free of opportunities for misinterpretation).

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By FactChecker
17th Apr 2024 21:46

In the olden days of onceuponatime, it wasn't unheard of for Life/Death-in-service cover to be 'thrown in for free' as part of the benefits available to members of the Employer's pension scheme.

However to the best of my knowledge those days are long gone - and OP has stated:
"The company pays substantial amounts for life cover/death in service" which surely must mean these are distinct benefits?
If so, follow TD's breadcrumbs to s1123 CTA 2009.

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