How is Private Health Insurance Taxed?

I have had private health insurance in the past through work and I am now considering taking out my own personal plan, I know I had to pay some form of tax on my company health insurance will this be the same on a personal plan.

Question asked by Paul Revell
Compare Top 10 UK
Takes approx. 60 seconds
Level of Cover
Date of Birth

Answered by Tom Conner

The tax on private medical insurance depends on whether you have taken out a personal health insurance plan or you are joining your organisations group health insurance scheme.


Do I Have to Pay Tax on Personal Medical Insurance?

The taxation of a personal health insurance plan is relatively simple, as you’re paying for premiums out of your net earnings (i.e. after income tax and National Insurance Contributions have already been deducted).

That means there’s no tax to pay on individual Private Medical Insurance except for insurance premium tax (IPT) which is already incorporated in the pricing of the premiums.


Company Health Insurance Taxation

If your employer pays for your medical insurance premiums, the taxation is very different.

When the premium is paid by your company it’s usually eligible for corporation tax relief and paid for by your company from pre-taxed earnings.

That means Group Health Insurance is considered a taxable P11d benefit in kind and employees can then be liable to a ‘Benefit in Kind’ tax.

Tax on corporate PMI

Here, the employees’ tax codes will be altered to reduce their personal allowance to take into account their benefit in kind.

Companies also have to pay employers’ National Insurance Contributions on the cost of each employee’s Medical Insurance premium each month.

private health insurance
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Compare Top 10 UK Insurers
  Takes approx. 60 seconds
Need help? 
Call us on 

Frequently Asked Private Medical Insurance Questions

If I need to see a physiotherapist will health insurance...
We are looking at taking out a comprehensive medical insurance plan and wanted to know whether we would...
I go to a private dentist for check-ups and hygienist and pay for the treatment out of my own pocket....
There are a number of good private hospitals in my area and I want to know if I can receive treatment...
Need Help? Live chat now and get an instant answer from our Experts...


Our Latest Reviews
Kevin Paul

Excellent service renewing our medical insurance, professional advice, good rates found and excellent professional after service, highly recommended.

Max Edgar

Nadeem was brilliant. He was very patient and worked very well with me to come up with the best solution possible for my budget. Perfect solution. Thank you very much.

Aidan Smyth

Dealt with me promptly and provided me with the most cost-effective option consistent with my requirements. Very pleased and thank you.

We are rated 4.9/5 based on 1129 independent client reviews.
To read more of our independent client reviews click here →
4.93 / 5 Average
1,222 Reviews
Overall Rating
Really, really helpful! Stopped me from signing up with an unhelpful company, and did basically all of the legwork for me in signing up with the right one. I can't have been the most helpful client as I'm 19 and only just started looking into it last week, but he took all the questions in stride! Put up with me turning to ask my dad questions every 2 minutes as well. I was helped by 2 workers; Sam and Nick. Thank you very much to both!
L Finch
Overall Rating
Good communication and follow ups. Friendly. A thorough research for my insurance needs.
Overall Rating

Sam Barr-Worsfold was very helpful and provided excellent customer service. Sam discovered I was paying too much premium for my current cover. Sam recommended and helped moved to a new cover with lower premium that provided the level of cover (terms required stated in the provider's policy) I wanted. I recommend highly recommend Sam and Drewberry Insurance. Thank you Sam.
Overall Rating
Thorough, knowledgeable and great communication
Overall Rating
Went through each policy in detail and made sure I was getting the correct one for me