When it comes to tax-efficient financial planning, accountants are often the first professionals business owners turn to. They’re trusted to reduce liabilities, maximise allowances, and structure company finances efficiently. But in 2025, accountants aren’t just talking about numbers — they’re talking about protection.

Across the UK, more accountants are recommending Relevant Life Insurance to their director clients. Why? Because it’s one of the few financial tools that simultaneously reduces corporation tax, provides personal family protection, and complies fully with HMRC guidance.

At Willow Private Finance, we’re seeing this collaboration between accountants and financial brokers grow stronger each year. For directors, consultants, and high-income professionals operating through limited companies, a properly structured Relevant Life plan is now considered part of best-practice tax planning — not just an optional extra.

This article explores why accountants are championing Relevant Life in 2025, how it fits into wider financial planning, and what business owners need to know to make the most of it.

To explore the broader benefits, see also The Tax Benefits of Relevant Life Insurance for Business Owners.

The 2025 Tax Environment for Directors

The tax landscape for small businesses and limited company directors in 2025 is more complex than ever. Corporation tax now scales with profits, dividend allowances have tightened, and the cost of extracting value from a business has increased.

For accountants, this has shifted the focus from short-term optimisation to long-term structural planning. The goal is not simply to pay less tax in a given year, but to build an efficient, compliant framework for salary, dividends, pensions, and benefits that works sustainably.

Relevant Life Insurance fits perfectly into this environment. It’s one of the few legitimate ways for directors to use their company to fund a personal benefit — life cover for themselves or employees — in a way that remains corporation tax deductible and exempt from benefit-in-kind rules.

In a world where HMRC is scrutinising every expense claim and dividend declaration, Relevant Life is a rare example of a “clean” tax advantage that stands up to audit-level compliance.

Why Accountants Are Leading the Conversation

Accountants are often the first to identify inefficiencies in how directors handle personal insurance. Many clients pay for life cover out of post-tax income, unaware that the same benefit could be provided through the business — reducing corporation tax in the process.

Here’s why accountants are increasingly recommending Relevant Life:

1. It’s HMRC-Approved and Fully Compliant

Relevant Life Insurance was designed specifically for limited companies that don’t qualify for group death-in-service schemes. It meets HMRC’s criteria for an allowable business expense because it benefits the employee (the director) and not the company.

This clarity gives accountants confidence that the expense will withstand scrutiny in annual accounts or an HMRC review.

2. It Improves Corporation Tax Efficiency

Because the company pays the premium, it can deduct the cost from profits before tax. With corporation tax rates as high as 25% in 2025, the savings are substantial.

3. It Creates No Benefit-in-Kind

Unlike most company-funded perks, Relevant Life does not appear on the director’s P11D form. The director receives no personal tax liability on the premium, while their family receives tax-free protection.

4. It Complements Pension and Salary Planning

Accountants often recommend Relevant Life as part of a broader package alongside director pension contributions and dividend planning. It ensures protection and retirement planning are both funded tax-efficiently through the company.

How Relevant Life Works in Practice

Relevant Life Insurance is structured as a company-funded personal protection policy.

• The company pays the premiums directly to the insurer.
• The policy is owned by the company but written into a trust for the benefit of the director’s family.
• In the event of death or terminal illness, the insurer pays a tax-free lump sum to the trust, which then distributes it to the beneficiaries.

Because the trust separates ownership and benefit, the payout sits outside the director’s estate — avoiding inheritance tax — while the company’s payment remains an allowable expense.

This simple yet elegant structure is what accountants love: clean, compliant, and effective.

Why Accountants See It as “Tax-Optimised Protection”

Relevant Life is more than just insurance. For accountants, it’s a planning tool that aligns with the three key priorities of most directors:

1. Tax Efficiency – It moves company money into personal protection without triggering dividend or income tax.
2. Wealth Preservation – It ensures the family receives funds outside the estate, free from inheritance tax.
3. Compliance Simplicity – It’s straightforward to record, audit, and justify within company accounts.

In short, it helps accountants deliver measurable results: lower corporation tax and better client outcomes — all without risk.

How It Fits into a Broader Financial Plan

Many directors mistakenly assume their accountant only handles numbers, while protection belongs to the financial adviser. In 2025, that line has blurred.

Accountants are increasingly collaborating with brokers like Willow Private Finance to ensure every element of a client’s financial plan — from company accounts to personal wealth protection — works together.

A well-designed strategy might include:

• Relevant Life Insurance for tax-efficient family protection.
• Key Person Insurance to secure business continuity.
• Pension contributions to extract profits tax-efficiently.
• Shareholder Protection to manage ownership succession.

These policies complement each other. Relevant Life protects the family, Key Person protects revenue, and Shareholder Protection secures ownership. Together, they form the foundation of a complete corporate and personal financial framework.

Common Misconceptions Accountants Help Correct

Despite its clear advantages, misconceptions about Relevant Life persist — and accountants are often the first to correct them.

Myth 1: It’s only for large companies.
In reality, Relevant Life was designed for small businesses — even one-person limited companies qualify.

Myth 2: It’s just another expense.
It’s a tax-deductible investment in family security. For many directors, the effective cost after tax relief is half that of equivalent personal cover.

Myth 3: It’s complicated to set up.
When handled by an experienced adviser, setup is quick. The trust can usually be executed digitally, with no ongoing admin burden.

Myth 4: It replaces all other business protection.
It doesn’t — it complements them. It protects the family, not the company itself.

By demystifying these issues, accountants add genuine value to their clients’ protection strategy.

Why 2025 Is the Year to Review Existing Arrangements

Many directors took out personal life insurance years ago without realising how their company structure changed their tax position. With evolving tax rates and tighter dividend rules in 2025, it’s the perfect time to reassess.

Accountants are proactively identifying clients with personal life cover and referring them to protection specialists to restructure those plans as company-funded Relevant Life policies. The result is identical cover for lower net cost, often saving thousands of pounds across the policy term.

At Willow Private Finance, we often work hand-in-hand with accountants to deliver these reviews — aligning financial accuracy with regulatory expertise.

How Willow Private Finance Works with Accountants

Our team at Willow collaborates with accountancy firms nationwide to provide clients with fully compliant, tax-efficient protection solutions.

We handle all aspects of the policy — from eligibility and trust setup to insurer selection and documentation — allowing the accountant to focus on advisory accuracy. Together, we deliver a seamless experience that ensures each director’s life cover is properly structured and reported.

For accountants, this partnership strengthens client relationships. For clients, it means total confidence that their protection is both tax-smart and robust.

The Outlook for 2025 and Beyond

The accountant’s role is expanding beyond compliance into holistic advisory support. Clients now expect their accountants to flag not just risks in their tax return, but gaps in their protection strategy.

Relevant Life fits naturally into this shift. It’s simple, compliant, measurable, and proven to add financial value. As awareness spreads, it’s likely that by 2026, most accountants will treat Relevant Life as standard practice in small company planning.

For directors, the question is no longer “Should I have life cover?” — but rather “Am I funding it in the smartest possible way?”

How Willow Private Finance Can Help

At Willow Private Finance, we specialise in working alongside accountants, solicitors, and tax advisers to structure holistic protection plans for directors and professionals.

Our independent, whole-of-market access means we find the most suitable insurer, while ensuring each policy meets HMRC and FCA compliance standards. Whether you’re a director seeking to review your existing cover or an accountant wanting to offer added value to clients, Willow can support you with clarity and precision.

Frequently Asked Questions

Q1: Why are accountants recommending Relevant Life Insurance now?

A: Because it’s fully HMRC-approved, reduces corporation tax, and offers directors personal cover without benefit-in-kind charges.

Q2: Can my accountant arrange Relevant Life Insurance for me?

A: Typically, no — accountants identify the opportunity but work with brokers like Willow Private Finance to arrange compliant policies.

Q3: How does it differ from personal life insurance?

A: Personal policies are paid from post-tax income, while Relevant Life is funded by the company, providing tax relief and inheritance tax protection.

Q4: Is it suitable for one-person limited companies?

A: Yes. Even single-director businesses qualify, provided the director is classed as an employee.



Q5: Will HMRC accept the premiums as deductible?
A: In most cases, yes — if structured correctly and shown to benefit the employee, not the company.

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