Government’s failure to include health and protection tax breaks in its Keep Britain Working Review, while disappointing, may not have all that much of an impact on firms’ desire to keep these benefits in place.
This is according to advisers Health & Protection spoke to following last week’s confirmation from the Departments for Work and Pensions and Business and Trade that tax policy will remain outside of the scope of its Keep Britain Working review.
The confirmation scuppered hopes that government will use the review to implement tax breaks for workplace interventions such as private medical insurance (PMI), group income protection or other health-related services.
Disappointing to see
Luke Nugent, independent insurance consultant at Santé Group, maintained it was disappointing to see this has been disregarded.
“I think providing tax breaks for PMI specifically is so important,” Nugent said. “The government are currently looking at pumping millions into the NHS however incentivising people to go down the private route can ease the burden on the NHS and I think the government should be supportive of this.
“If there was an incentive in place, people who can afford it (consumers) would be more inclined to take it out and employers are likely to also be more inclined to offer it to their staff if there was some kind of tax break for this.
“I am sure business owners are looking at all possible ways to reduce the tax they pay given the recent Budget. The government needs to support businesses more full stop.”
Rate not a concern
But according to Emma Wood, director of healthcare at Broadway Insurance, none of her clients are whingeing about the 12% tax rate.
“It’s never been an issue and I get that employer national insurance contributions have gone up, but again, I’ve not had anyone say to me they can’t afford PMI because we’ve got to pay extra national insurance,” Wood said.
“So it’s difficult for me to say.
“At the moment, most pressing to the client is they want to do something for the whole of workforce – what can we do? Can we see a benefit for things like that?
“It’s more about what they can do with the policy to keep it affordable and sustainable long term.
“The other thing is nobody can pull these benefits out. They’re in people’s contracts so it’s more about tailoring those plans to meet the needs of the employees, but remain sustainable cost wise long term.”
Value added services driving demand
And Britney Trussler, protection manager at Dynamo noted that the value-added services attached to income protection policies are a key driver for customers to take out cover at the moment.
“Our top product at the moment is income protection,” Trussler said. “There definitely is an influx in that area at the moment.
“There are a lot more people that I speak to are opting for that over your life insurance.”
Trussler added that there has been a lot more education around the fact that these products include the GP services and everything else.
“Given what’s going on with the NHS, I’ve had someone contact me simply because they can benefit from something like that because they have been on a therapy wait list for eight months now,” she added.
“So I definitely think there is an appetite for the education we’re getting out there on those products.
“Even though that isn’t the reason we want them to look at them, it’s an avenue that gets them to come across so they can have that discussion.”