Part 5Employment income: deductions allowed from earnings
C1Chapter 2Deductions for employee’s expenses
Employee liabilities and indemnity insurance
349Meaning of “qualifying insurance contract”
1
In section 346 “qualifying insurance contract” means a contract of insurance which meets conditions A, B, C and D.
2
Condition A is that, so far as the risks insured against are concerned, the contract only relates to one or more of the following—
a
the indemnification of an employee against a liability related to the employment,
b
the indemnification of a person against vicarious liability in respect of a liability related to another person’s employment,
c
the payment of costs or expenses incurred—
i
in connection with a claim that a person is subject to a liability to which the insurance relates, or
ii
in connection with any proceedings relating to or arising out of a claim that a person is subject to a liability to which the insurance relates,
d
the indemnification of an employer against loss from a payment made by the employer to an employee in respect of—
i
a liability related to the employment, or
ii
any costs or expenses incurred as mentioned in paragraph (c).
3
Condition B is that—
a
the period of insurance under the contract does not exceed 2 years or, if it does, it does so only because of one or more renewals, each for a period of 2 years or less, and
b
the insured is not required to renew the contract for any period.
4
Condition C is—
a
that the insured is not entitled under the contract to receive any payment or other benefit in addition to—
i
cover for the risks insured against, and
ii
any right to renew the contract, or
b
if the insured is so entitled, that the part of the premium reasonably attributable to the entitlement is not a significant part of the whole premium.
5
Condition D is that the contract is not connected with another contract.
Pt. 5 Ch. 2 restricted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 33 para. 1(5) (with Sch. 36)