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Private Health Insurance & Corporate Benefits
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UK tax legislation is complicated, if not a minefield. Not only that, but it seems to be changing all of the time. When considering the tax advantages and liabilities of company health insurance, therefore, and as with many questions concerning UK taxation, it is often prudent to consult an expert.
Tax advantages to the company
With the opening caveat in mind, however, many businesses have shown that it is possible for company health insurance premiums to be treated by the Inland Revenue as a genuine, allowable business expense. (Though, as mentioned above, do check as there are often criteria to be met).
This enhances the value of health care benefits to the individual employee, of course, because if he or she were to buy an equivalent level of medical cover independently, it would be from his or her net income (in other words, after tax).
Furthermore, the individual also benefits from the discounts available to the corporate health insurance policy holder.
Tax advantages to the individual
Unfortunately, the individual’s position with respect to his or her personal tax liability may be considerably less generous. Official guidance makes clear that if you work in the UK and the company you work for provides private medical insurance (PMI), usually, this counts as a taxable benefit.
Individuals may enjoy some tax-free medical benefits, although typically these only include any premiums that are paid for medical insurance whilst you are working abroad.
Lobbying
A number of pressure groups, including consumer associations, believe that the tax legislation relating to company health schemes provide insufficient incentive for either businesses or individuals to share in or take responsibility for their health care.
Lobbying of the government is likely to continue, therefore, until changes are made to UK taxation legislation, so that greater incentive is provided both within the workplace, through company health insurance, and at the individual level, as is seen in many other jurisdictions.
