Hi
This will depend upon who receives the "benefit " of the life Insurance. If this is Key Man/Woman Insurance and if the Director dies the benefit goes to the company then this is a business expense and would be categorised within the expenses as Insurance ( Life).
If the benefit of the life insurance goes not to the company but to the Directors family as would normally be the case then this is a personal payment and should be treated like any other personal payment.
1. Either paid for personally by the director or
2. IF paid by the company - put to the Directors current account ( loan account) within the company so it can be repaid by the director either in cash terms or by offsetting dividends or salary.
or
3. If paid by company but given to the director as perk - recorded as a company expenses but marked as a Plld item and then declared at the end of the tax year as a Plld item whereby tax and ni would be payable by the director and employers class 1A national insurance payable by the company.
I hope this helps
Martyn A Smith A.F.A, M.I.P.A
Institute of Financial Accountants
www.themobileaccountant.co.uk
Certified Gold Quickbooks Trainer and Accountant
www.quickbookstraininguk.co.uk
