group death-in-service

Provision of a Death-in-Service scheme goes a long way towards demonstrating an employer’s genuine care for staff welfare as well as encouraging loyalty and reassuring employees that they are valued.

group death-in-service

It’s a simple benefit and normally the amount paid is based on multiples of salary. As a benefit, it helps show you care and often forms a core element of a modern benefits package. It also provides financial reassurance for family and dependants and protects your business in the event of the death of an employee.

ABC Ltd decided they would provide a tax-free lump sum payment to their employees. They chose a 4 times multiple of salary, with an overall benefit of £955,408 to its 12 employees, which cost the business an annual premium of £504.46.

benefits to the employer:

  • Choice of cover options available, either a fixed lump sum amount or a multiple of salary.
  • Covers groups of employees for different amounts.
  • A valued employee benefit that helps retain and attract employees.
  • Promotes good employer-employee relations.

The registered schemes premiums are usually allowable as a business expense, thereby reducing the net cost to the employer through corporation tax relief.

benefits to the employees:

Additional free services, which include:

  • Bereavement Counselling.
  • Probate helpline.
  • Access to a GP 24/7.
  • Mental health support.
  • Get fit programme.
  • Financial and Legal support.

Additional Benefits:

  • Premiums paid on an employee's behalf are not treated as a benefit in kind.
  • Any lump sum benefit is normally payable outside an employee's estate and free from Inheritance Tax liability.