This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

malpractice insurance- personal or business expense?

Suttonian
Posts:1
Joined:Mon Oct 30, 2017 4:52 pm
malpractice insurance- personal or business expense?

Postby Suttonian » Mon Oct 30, 2017 5:13 pm

I have a bit of a complex query please. In addition to working as a doctor for the NHS, I do some private medical practice, and recently set up a company for this. I pay malpractice insurance to the Medical Protection Society which is one of the professional bodies approved by HMRC for tax relief. Although some of this relates to protection against general risks of being a doctor e.g. defence in case of referral to the General Medical Council, most of it is proportionate to private earnings on a sliding scale. My question is whether the insurance should be set against tax on the company tax return or personal tax return? Since personal tax is higher it would clearly be advantageous to be able to set it against this, and maybe the fact that the insurance can only be in the individual’s name would be an argument for this. On the other hand, all the income comes into the company so maybe it would need to be claimed as a company business expense?

I would really appreciate any thoughts on this difficult question. Many thanks in anticipation.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: malpractice insurance- personal or business expense?

Postby pawncob » Wed Nov 01, 2017 1:11 pm

The income may come through the company, but it's YOU that's insured, so it's personal.
With a pinch of salt take what I say, but don't exceed your RDA

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: malpractice insurance- personal or business expense?

Postby bd6759 » Thu Nov 02, 2017 11:56 pm

Nothing to stop the company paying it on your behalf, or reimbursing you. This would be an allowable expense in the company P&L account.

Whilst technically the payment by the company would be taxable on you as income, the sub to MPS is a tax deductible expense for doctors. This would remove any tax liability on you.


Return to “Business Tax”