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Life Insurance as a contractor

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    #41
    Thanks for your work on this. My accountant is (understandably) pretty cautious about this right now. He's not strictly a contractor accountant (I've got some other complications in my business), but he filled me in on RLP. On this, however, he's skeptical.

    I obviously don't expect you to give us clarity on the tax question (though I appreciate the link you provided). If we've got a worthless taxation authority that can't figure out how they view it, how are you supposed to figure it out?

    But I assume Aviva has some kind of plan in place in the event of an adverse ruling, and it would be nice to know what that would be, in the interests of making an informed decision.

    Comment


      #42
      Originally posted by WordIsBond View Post
      Thanks for your work on this. My accountant is (understandably) pretty cautious about this right now. He's not strictly a contractor accountant (I've got some other complications in my business), but he filled me in on RLP. On this, however, he's skeptical.

      I obviously don't expect you to give us clarity on the tax question (though I appreciate the link you provided). If we've got a worthless taxation authority that can't figure out how they view it, how are you supposed to figure it out?

      But I assume Aviva has some kind of plan in place in the event of an adverse ruling, and it would be nice to know what that would be, in the interests of making an informed decision.
      Let me see what else I can find out. I've already sent your questions onto the legal team at Aviva so lets see what they come back with.

      John Yerou

      Comment


        #43
        Originally posted by Freelancer Financials View Post
        Let me see what else I can find out. I've already sent your questions onto the legal team at Aviva so lets see what they come back with.

        John Yerou
        I received this response from the provider.

        Unfortunately we cannot comment on what might happen down the line. All of your questions are hypothetical and for that reason we are not in a position to comment.

        What I can confirm, with certainty is that before we invested time building this product, we liaised heavily with HMRC, Tax advisers & QC’s that confirmed we have fulfilled the criteria for this to be deemed a relevant Life with Critical illness.

        The document I have attached above explains the legislation around a relevant life and how we have been able include Critical illness cover with this. It explains that it is due to the inclusion of the Terminal illness benefit which means we are able to include Critical illness. I understand that competitors have challenged our offering but we are satisfied that this is a legitimate setup, I also understand why our competitors would ‘bash’ this as we are the first to market this product. I expect very shortly, said providers will be investing time on building and launching their own version of this product shortly.

        I hope that provides you with confidence that Aviva would not launch a product into the market without doing the applicable checks against the current legislation. HMRC have verified that this setup fits with a relevant life offering.

        Comment


          #44
          Originally posted by Freelancer Financials View Post
          I received this response from the provider.

          Unfortunately we cannot comment on what might happen down the line. All of your questions are hypothetical and for that reason we are not in a position to comment.

          What I can confirm, with certainty is that before we invested time building this product, we liaised heavily with HMRC, Tax advisers & QC’s that confirmed we have fulfilled the criteria for this to be deemed a relevant Life with Critical illness.

          The document I have attached above explains the legislation around a relevant life and how we have been able include Critical illness cover with this. It explains that it is due to the inclusion of the Terminal illness benefit which means we are able to include Critical illness. I understand that competitors have challenged our offering but we are satisfied that this is a legitimate setup, I also understand why our competitors would ‘bash’ this as we are the first to market this product. I expect very shortly, said providers will be investing time on building and launching their own version of this product shortly.

          I hope that provides you with confidence that Aviva would not launch a product into the market without doing the applicable checks against the current legislation. HMRC have verified that this setup fits with a relevant life offering.
          Oh it's QC approved... Must be ok then
          'CUK forum personality of 2011 - Winner - Yes really!!!!

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            #45
            Originally posted by northernladuk View Post
            Oh it's QC approved... Must be ok then
            Their statement sort of comes across as my QC is bigger than your QC...............so at least they have sought suitable advise
            However I hope this does turn out to be ok as it sounds like a nice to have if legit.

            I remember once many moons ago doing Jury service in Maidstone for what turned out to be a rather nasty GBH case.
            Anyway the bad guy got 10 years, but I digress.
            The prosecution and defence QCs were the spitting image (I wish they would bring that show back) of Fry and Laurie in both looks and behaviour!
            So now I am worried, am I being deceived, just how much sugar is really in a spoon full!

            Comment


              #46
              Originally posted by Freelancer Financials View Post
              I received this response from the provider.
              Thank you for your effort on this.

              Originally posted by Freelancer Financials View Post
              Unfortunately we cannot comment on what might happen down the line. All of your questions are hypothetical and for that reason we are not in a position to comment.
              Absolute rubbish. They have no response / contingency plan if they lose a court case on this? They are an INSURANCE company. Their whole business is built on planning ahead.
              Originally posted by Freelancer Financials View Post
              What I can confirm, with certainty is that before we invested time building this product, we liaised heavily with HMRC, Tax advisers & QC’s that confirmed we have fulfilled the criteria for this to be deemed a relevant Life with Critical illness.
              But HMRC aren't confirming that to their potential clients. And since we aren't being told what happens if their tax advisers and QCs are wrong, it's pretty clear that we're on the hook if things go wrong. They've made no provision to protect / indemnify their clients in the case of an adverse ruling, or they'd be telling us all about it. So we're supposed to jeopardise our tax position on the word of their QCs without any clear statement from HMRC or any protection from them.

              Originally posted by Freelancer Financials View Post
              I hope that provides you with confidence that Aviva would not launch a product into the market without doing the applicable checks against the current legislation. HMRC have verified that this setup fits with a relevant life offering.
              It only "provides me with confidence" when / if I see that HMRC verification. If it can be relied upon, it can be provided to the people who are on the hook.

              This kind of plan makes all the sense for HMG to encourage. Sure, it costs a little bit of tax revenue if a lot of people take it up. It also means fewer people with catastrophic illnesses become dependent on society -- or at least, they have a longer time period to try to adjust before that dependency begins. It would be entirely reasonable, far-sighted, and undoubtedly cost effective for government to encourage this, especially for the self-employed who don't have the same kind of cushion in illness that employees often have. It's exactly the kind of thing that everyone wanting to do stuff for the self-employed should get behind, and the immediate cost to government is very small and far outweighed by the long term benefits.

              So there is absolutely no reason that HMRC shouldn't come out with a statement endorsing this, if it is legit, and if they've endorsed it privately. Then, everyone in the market can jump in, there's competition, etc.

              Hasn't happened. So either Aviva is not to be trusted here, or HMRC is being stupid. If I had to guess, I'd actually guess the latter. But I don't have to guess, I can just wait a while, I guess.

              Comment


                #47
                Relevant Life doesn't cover CI, just Life.

                For me CI is just as important, however the premium shoots up as a result, as I have just found up from topping up... And you cannot charge CI cover through the Ltd co.
                ______________________
                Don't get mad...get even...

                Comment


                  #48
                  Originally posted by kaiser78 View Post
                  Relevant Life doesn't cover CI, just Life.

                  For me CI is just as important, however the premium shoots up as a result, as I have just found up from topping up... And you cannot charge CI cover through the Ltd co.
                  Have you read the thread?

                  There is now a relevant life policy that covers CI and can be paid through yourCo.

                  However, some of us would like HMRC to confirm that Aviva's interpretation matches their own.

                  Comment


                    #49
                    Originally posted by mudskipper View Post
                    Have you read the thread?

                    There is now a relevant life policy that covers CI and can be paid through yourCo.

                    However, some of us would like HMRC to confirm that Aviva's interpretation matches their own.
                    Sorry no, not all of it. I was basing on my experiences from last year when looking to set this up, although am still not sure if this is cost effective...
                    ______________________
                    Don't get mad...get even...

                    Comment


                      #50
                      Is there an online quote tool for RL policies?
                      How do they compare to standard cots life policies?
                      So far all I have read is Gumph for advisors to use and portals harvesting detail with promises to call back later with the best quote which have turned out to simply be pimps for individual companies.

                      So what is the best way to buy one of these policies and compare prices?

                      Edit
                      Here is a bit of waffle specifically mentioning IT contractors but for me when I see mention of the word IFA that immediately means add on Kerching which is a bit off putting!

                      https://www.unbiased.co.uk/news/how-...ess-money/1874
                      Last edited by DallasDad; 10 March 2016, 20:02. Reason: url
                      So now I am worried, am I being deceived, just how much sugar is really in a spoon full!

                      Comment

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