Income Replacement Claim & EBTs

[ASB]

I think the whole ASU arena is a bit of a minefield for anybody in business on their own account. Personally I never bothered with any. I just worked on the basis that with average luck I'd be OK :-)


Though they used the word "instead" I think you may be reading too much into it. It does not imply mutual exclusivity.

e.g. payment of £10k salary and £40k dividends instead of £50k salary.

But as with all these things the devil is in the detail and getting confirmation would be advisable.

[TheFaQQer]

Dividends are a red herring in this case, though, since tax is paid on them. For the OP, what income was taxable? There's your answer.

I'd be prepared to argue for dividends being included if the need arose, but to try to argue that something which you paid no tax on counts as taxable income is stretching the definition a bit!

Another possibility would be to fess up to HMRC and pay the tax, and then claim on the insurance, since the EBT is now taxable income.