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Professional Indemnity

6 articles on professional indemnity for UK solicitors and law firms.

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Every Professional Indemnity article

6 guides for UK solicitors and law firms.

Is Professional Indemnity Insurance Tax Deductible for a Solicitor?

Professional indemnity insurance (PII) premiums are a fully tax-deductible trading expense for UK solicitors, whether you are a sole practitioner, an LLP member, or a limited company director. The deduction is taken at firm level for a partnership or LLP and at company level for a company. The premium is exempt from VAT, so there is no input tax to reclaim, and run-off cover bought on cessation is deductible too. This article explains where the deduction sits, how run-off is handled, and the common pitfalls.

9 min read

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Want your PII cover and its tax treatment checked?

The SRA minimum terms require £3 million per claim for recognised and licensed bodies and £2 million in other cases, with six years of run-off on cessation. Premiums are a deductible trading expense and exempt from VAT, so there is no input tax to reclaim.

  • SRA Accounts Rules 2019Client account, five-weekly reconciliations under Rule 8.3, and the Rule 12 accountant's report
  • Partnership, LLP and incorporatedProfit shares, the salaried member rules and the tax that follows each structure
  • One team, start to finishThe same accountants throughout, not passed around

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