The tax on private medical insurance depends on whether you have taken out a personal health insurance plan or you are joining your orgnisations group health insurance scheme.
Personal Health Insurance Taxation
When discussing the taxation of a personal health insurance plan where you are paying premiums from your net earnings there is no further tax to be paid as the income from which you are paying the premiums has already been taxed. The only tax payable on the private medical insurance plan is insurance premium tax (IPT) which is already incorporated in the pricing of the premiums.
Company Health Insurance Taxation
Group health insurance can be taxed very differently if the premium for the medical insurance is paid by your employer. Should the premium be paid by your employer it can be paid from pre-taxed earnings which means as private medical insurance is considered a P11d Benefit the employee can then be liable to a 'Benefit in Kind' tax , with a 'benefit in kind' taxation your tax code is altered reducing your personal allowance to take account of the additional tax liability.
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 020 8432 7333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.