Security assets or services, and indemnity insurance
There may be a serious and credible threat to an employee because of his or her employment. Where this occurs, the employer may choose to pay for security assets or security services for the employee. These payments are not taxable benefits in kind.
A security asset includes equipment or structures (such as alarms, security cameras and security gates). It does not include any form of vehicle, a home or land.
The exemption from benefit in kind does not apply to security measures taken against:
- general criminal threats which all citizens face
- general threats to the employee's property from burglary or larceny
- or
- threats separate to the employee’s work.
Indemnity insurance
The employer may pay indemnity insurance to provide cover for their employees or directors. The tax treatment of this payment depends on who the policy provides cover for. A policy can either:
- provide cover for an employee or director personally (proceeds from the policy would be paid directly to the employee or director)
- or
- provide cover for the business (proceeds from the policy would be paid to the business).
Policy provides cover for the employee or director personally
Where the policy provides cover for the director or employee personally, the insurance costs incurred by the employer are a taxable benefit in kind. The director or employee is chargeable on the benefit under the Pay As You Earn (PAYE) system to:
Where the policy provides cover for the business, the insurance costs incurred by the employer are not a benefit in kind for the employee.