Group Risk Benefit Tax Calculator
Calculate the tax treatment of employer group risk benefits — group life assurance, group income protection, and group critical illness. P11D reporting and CT relief for employers.
Group Risk Benefit Tax Calculator
Employer-provided group risk benefits receive favourable tax treatment. This calculator shows the tax position for both the employer (CT deduction) and employee (BIK or BIK-exempt).
Frequently Asked Questions
What is a group risk benefit?
Group risk benefits are employer-provided insurance covering multiple employees: group life (death in service lump sum), group income protection (income replacement during illness), and group critical illness (lump sum on diagnosis). They are typically more cost-effective than individual policies.
Are employer group life assurance premiums a BIK?
No. Group life/death in service premiums paid by an employer are exempt from benefit in kind rules under ITEPA 2003 s.307, provided the scheme covers employees generally (not a selective arrangement). Premiums are fully CT-deductible for the employer.
Is the death in service lump sum taxable?
Death in service lump sums are paid through a discretionary trust outside the employee's estate (no IHT). The payments are tax-free up to the Lump Sum Death Benefit Allowance (£325,000 for 2025-26). Amounts above the LSDBA are taxed at the recipient's marginal income tax rate (45% for most).
Do group risk benefits need to be reported on P11D?
Generally, no. Group risk benefits that cover the whole workforce (or broad employee categories) are exempt from P11D reporting under ITEPA 2003 s.307. However, if the scheme is selective or provides additional benefits to specific employees, a P11D entry may be required.
What is the Lump Sum Death Benefit Allowance for 2025-26?
The Lump Sum Death Benefit Allowance is £325,000 for 2025-26 (replacing the old lifetime allowance death benefit rules). Pension and group life lump sums above this limit are taxed at 45% on the recipient. Each individual has their own LSDBA.
Are group income protection benefits taxable for employees?
Yes. GIP benefits paid to employees are treated as employment income, taxed through PAYE, and subject to employee NI. The employer also pays employer NI on the benefit payments. This is unlike personal IP policies where benefits are tax-free.
Do group risk premiums qualify for the employer NI allowance?
Employer NI on benefits (not on premiums) may be offset against the Employment Allowance (£10,500 for 2025-26). Premiums themselves are not subject to employer NI — only actual benefit payments trigger employer NI for group IP schemes.
What happens to group risk cover during redundancy or restructuring?
Group risk cover typically ceases when employment ends. Employees may have the right to convert to an individual policy without medical underwriting (continuation option) within a specified period. Check the policy terms — this right is a valuable benefit during redundancy.