Tax breaks spell good news for Directors and key decision makers

If you are a Director of a Limited Company or in a senior position, with the ability to influence the shape of your remuneration package, and you have a life assurance policy that you pay for personally, you may want to know about some significant tax savings that are available.

If you don’t have any life assurance yet, but think that you should, then now is the time to look at putting a plan in place, that’s paid for by the company, is fully deductible for the purposes of Corporation Tax, does not incur a National Insurance surcharge and which is not taxed as a benefit in kind. Furthermore, the final payout on death is also free of any tax, including Inheritance Tax.

So, in short, if you are already paying for life assurance out of your own pocket, you could make savings in excess of 50% of the current cost of making this provision using a type of term assurance policy called a Relevant Life Plan.

Who can benefit?

  • Directors wishing to provide their own individual “death in service” benefits without taking out a scheme on all employees.
  • High earning individuals, such as directors, where “death in service” benefits may interfere with their lifetime pension allowance.
  • Employers looking to provide “death in service” benefits, but with too few employees to set up a group scheme.
  • Members of “group death in service schemes” where the benefits only relate to their basic salary and not their true earnings.

Relevant Life Plans are not available where there is no employer/employee relationship. For example, sole traders, equity partners of a partnership or equity members of Limited Liability Partnerships are not eligible for these policies, although their employees are.

What’s more, if the company is subject to a takeover, merger or goes into liquidation, the individual concerned does not have to lose their life cover. This is also the case, in the event that they are laid off, sacked or retire on the grounds of ill health. Because the policy is for the benefit of the individual’s dependents, they can take the policy with them when the relationship with the employer ceases, rather than have to apply for life cover all over again, at a time when their health may have deteriorated.

For more information, contact one of our specialist advisors, on 01462 440088.

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New EU driving licence will reduce fraud

A new driving licence model was introduced across Europe earlier this year, to guarantee freedom of movement for EU motorists and more importantly, to help reduce fraudulent activity.

The new credit card style licence will replace more than 110 different variants currently in circulation. It will establish standardised rules on the design of the licence, medical examination requirements and will lease the period for which it is valid.

The license will be in a different format to older styles. The expiry date will be shown on the front, with all vehicle categories listed on the back, with dates to show the driver’s entitlement. All new licences will be issued in this format, with existing ones being replaced at the time of renewal or, at the very latest, by 2033.

To harmonise all the licences, there are a number of changes to the rules in Great Britain; these include new towing rules for both cars and small vehicles. They stipulate that drivers with category B licences issued after 19th January 2013 will only be able to tow small trailers, weighing no more than 750kg, or heavier ones where the combined weight of the towing vehicle and trailer is no more than 3,500kg. In order to exceed the 3,500kg limit the driver must pass a mandatory test and get B+E entitlement on their licence.

There are also changes to bus and lorry driver requirements. As well as a new minimum age of 24 to drive a bus, unless holding a Certificate of Professional Competence, driving licences issued to drivers of medium and large lorries, minibuses, buses and coaches will be valid for a maximum of five years.

Bus and lorry drivers will also need to sign a medical declaration to renew their licence, with those aged over 45, requiring to submit a medical examination report, proving that they meet the required standards. These changes came into effect for new drivers passing their test after 19th January 2013, with existing drivers, who typically hold a 10-year licence, coming under the new rules at the earlier of licence or lorry/bus entitlement renewal.

For more information on how this may affect your fleet policy, or for any other motor insurance related enquiries, please call our experienced team of advisors, on 01462 440088.

 

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Let our experts advise you on obligatory Company Pension Schemes

As part of the NPA Group, Nott Pybus & Associates Ltd specialist advisors can help you to choose the right company pension scheme. For Group Pensions, from October 2012 new legislation was introduced to encourage more people to save for retirement.

Employers, by law, now have to enrol certain employees and make contributions on their behalf. This means setting up a pension scheme (if you have not done so already), suitable for automatic enrolment, which must meet certain criteria. Employers now have to automatically enroll workers who:

  • Are over 22 and below state pension age
  • Have a salary of at least £9,440 per annum
  • Do not currently belong to a scheme that meets the required criteria

To give an example of the future cost to a business, the percentage of an employee annual salary to be paid at various dates is as follows, depending on what basis the employer chooses:

 

Dates

Minimum Employer Contribution

Total Minimum Contribution

October 2012 – September 2017

2%

3%

October 2017 – September 2018

3%

6%

October 2018 onwards

4%

9%

 

Auto-enrolment is compulsory and employers must adhere to their duties by law. The Pensions Regulator will ensure that employers comply with the new rules – if not, they could face heavy fines or even imprisonment.

It is therefore crucial that you are aware of your responsibilities, who is to be enrolled and from what date. You may also wish to factor in the future cost to your business, both in terms of contributions to be made, as well as the time it will take to administer the scheme.

For more information, please contact one of our Financial Advisors on 01462 440088.

 

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Motor premiums slump to lowest level in two years


The average price of car insurance in the UK has fallen by 9.8% over the last year, taking premiums to their lowest levels since January 2011, according to research from  the AA.

The AA’s British Insurance Premium Index revealed the average cost of car insurance was £594.86, representing a reduction of 3% on the previous quarter.

The Director of AA Insurance, Simon Douglas said: “This fall, the biggest the AA’s Index has recorded since it started in 1994, is the sixth successive quarterly drop in premiums.  It will be welcome news for hard-pressed motorists facing sharp fuel price increases.”

However, the index also revealed that not everyone benefitted from price drops, with young female drivers facing a small increase.

Douglas said “The background of falling premiums has helped insurers to more effectively manage the premium gap between men and women, although young drivers have fared least well.  Some new and young women drivers will have seen a small premium increase, even after taking their no-claims discount into account.”

 

AA article image

 

Home Insurance

The AA’s research also looks at the cost of home insurance, where the average price has fallen 5% over the last year to £130.45

Douglas said that the selection of Flood Re would help to keep premiums affordable: “While the details have yet to be thrashed out, I understand that the Flood Re agreement will see premiums for homes in flood-prone areas capped in line with council tax bands, making them affordable.

“I do see this as very welcome news, although primary legislation will be needed, as well as EU approval before the agreement takes effect, which will take time.”

However, Douglas did have one warning for insurers about the agreement:

“If there is a major flood disaster soon after the agreement is finalised, it will most likely lead to a sharp rise in home premiums, as we saw following the 2007 disaster,” he said.

To discuss your motor and home insurance requirements in more detail, call NPA’s specialist team of account handlers on 01462 440088.

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Bring in our experts to efficiently settle your claim

Insurance claims can be complex, time consuming and confusing.  Getting an insurance claim settled is about knowing exactly what to do and having the right information with which to provide your  insurance company.

Lorega is a long standing partner of NPA, employing over 70 independent Chartered Loss Adjusters (regulated by CILA) who work on behalf of our policyholders to prepare, negotiate and settle their insurance claims effectively and as fairly as possible.  Their experts have a wealth of knowledge gained over 25 years of experience, and can effectively `hold our clients hand’ through the entire process, from initial trauma to conclusion, giving our clients absolute control of their claim.

A client of ours recently suffered a devastating total-loss fire claim to one of their commercial units (four further units were also damaged).  Fortunately, they had purchased a Lorega Loss Recovery policy at renewal in June 2013. The incident took place at 18:30 on the 2nd July 2013. The very next afternoon, Steve Williams (one of Lorega’s highly experienced Loss Adjusters) joined our claims manager to visit the incident site. They assessed the scope of the damage, collating the necessary information and providing immediate and practical advice, not only to our insured, but also to the tenants of the damaged units.

For more information, or to discuss Lorega’s services in more detail, please call our specialist brokers Mark Francis or Stewart Drysdale on 01462 440 088.

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