Yes. If you run a limited company, the company can pay for private health insurance for you as a director and for employees. The premium is normally an allowable business expense, so it reduces the company’s corporation tax bill. However, because it’s a benefit provided by reason of employment, it also creates a taxable benefit in kind for the individual, reported on a P11D, plus employer Class 1A National Insurance. So it’s a company expense, but not a tax-free perk — the tax simply moves rather than disappears.

It can be, but it’s rarely completely tax-free. The company gets corporation tax relief on the premium (currently saving 19% to 25% depending on profits), and paying through the company avoids taking taxed salary or dividends to fund it personally. Against that, the director or employee pays income tax on the benefit value at their marginal rate, and the company pays Class 1A National Insurance at 15%. For many directors it still works out better than paying personally, but the exact saving depends on your tax rates — check with your accountant.

When your company pays for your private medical insurance, the premium is a taxable benefit in kind. Two separate charges apply. The individual pays income tax on the benefit value (the premium) at their marginal rate — 20%, 40% or 45% — usually collected through a tax code adjustment or Self Assessment. The employer pays Class 1A National Insurance at 15% (for 2025/26 onward) on the same value. The benefit is reported to HMRC on form P11D, with the employer’s total Class 1A shown on the P11D(b).

For the 2025/26 tax year onward, employer Class 1A National Insurance on benefits in kind, including private medical insurance, is 15%. This rose from 13.8% on 6 April 2025 as part of the employer NI changes. It’s paid by the company, not the employee, on the taxable value of the benefit, and is due by 22 July following the tax year (19 July if paying by cheque). Any calculation still using 13.8% for 2025/26 or later would understate the cost.

Generally no. If you’re a sole trader (not a limited company), private health insurance for yourself is usually treated as a personal expense and isn’t tax-deductible against your trading profits, because it’s not considered wholly and exclusively for the business. This is a key difference from limited companies. Sole traders who want cover usually just buy it personally. If you employ staff, cover you provide for them may be deductible — but your own cover typically isn’t. See our self-employed guide for the detail.

Often yes. Many company policies let you add a spouse, partner and children, and you can also cover employees as part of a benefits package. Each person’s cover is a benefit in kind for whoever it relates to, so family cover added for a director increases the director’s P11D benefit, and employee cover creates a benefit for each employee. The company still gets corporation tax relief on the premiums and pays Class 1A on the total. For teams, a dedicated business or group scheme is usually more cost-effective.

No. Private medical insurance is not one of the benefits that keeps its tax and NIC advantages under a salary sacrifice arrangement. Since the 2017 optional remuneration rules, medical insurance provided through salary sacrifice is taxed on the higher of the salary given up or the benefit value, so it doesn’t produce the savings that pensions or cycle-to-work can. In practice, companies simply pay for PMI as a normal benefit in kind rather than via salary sacrifice.