Can I claim tax relief on professional indemnity insurance?
If you have to hold professional indemnity insurance for your job and you pay for it yourself, you may be able to claim tax relief on the cost. The treatment differs slightly between employees and the self-employed, but in both cases the insurance must be genuinely required for your work.
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Check what you're owed →Professional indemnity insurance protects against claims arising from the work you do, and in many professions you are required to hold it. Where you pay for cover that is necessary for your role and your employer does not reimburse you, employees can often claim tax relief on the cost, reducing the income they are taxed on.
For the self-employed, professional indemnity insurance that relates to running your business is usually an allowable business expense, deducted from your income to arrive at your taxable profit. This is generally more straightforward than the employee route, as business insurance costs are a normal part of working out a sole trader’s profits.
In both cases, the key is that the insurance must be required for, and relate to, your work rather than being a personal choice unconnected to it. Keeping records of the premiums you pay supports your claim, and for employees in particular it is worth checking whether you have been claiming this where you have funded the cover yourself over several years.
How to claim relief on professional indemnity insurance
- Confirm it is required. Check the insurance is genuinely needed for your work and relates to your role rather than personal cover.
- Confirm you pay for it. Make sure you fund the premiums yourself and are not reimbursed by your employer.
- Keep premium records. Retain evidence of the premiums you paid for each year you want to claim.
- Claim appropriately. Employees claim through HMRC or Self Assessment; the self-employed include it as a business expense on their return.
Frequently asked questions
- Can employees claim for this insurance?
- Often yes, where the cover is genuinely required for the job and you pay for it yourself without being reimbursed by your employer.
- How is it treated for the self-employed?
- Usually as an allowable business expense, deducted from your income when working out your taxable profit.
- Does the insurance have to be required?
- Yes. It must relate to and be needed for your work, rather than being a personal choice unconnected to your role.
- Can employees claim for past years?
- Often yes, for earlier years you paid the premiums yourself and qualified, within HMRC’s time limits.
MoneyFinder is an independent sign-posting service that helps you find financial support you may be entitled to. We are not a government body and do not provide financial advice. Figures are taken from the official sources cited above and were correct when last checked — always confirm current details on the linked GOV.UK pages.