Can Your Limited Company Pay for Private Medical Insurance? Here’s What You Need to Know
Running a business often means long hours, full calendars, and very little time to wait around. So when it comes to your health, having faster access to care can feel less like a luxury and more like a necessity.
That’s where private medical insurance (PMI) comes in.
But here’s the big question: Can your limited company cover the cost of it?
Let’s break it down clearly, practically, and in plain English.
What Is Private Medical Insurance?
Private medical insurance is a policy that helps cover the cost of private healthcare.
It can mean:
- Shorter waiting times
- Faster diagnosis and treatment
- Access to private hospitals and specialists
For company directors, it’s often seen as a way to stay on your feet and back to business without delays.
Yes, Your Company Can Pay for It
Your limited company can pay your PMI premiums but there are tax rules attached.
Here’s what happens:
HMRC treats it as a Benefit in Kind (BIK)
That means:
You’ll be taxed personally on the value of the insurance
Your company will pay Class 1A National Insurance on it
It must be reported on a P11D form
So even if your business covers the bill, you’ll still need to account for the personal tax implications.
Is It Tax-Efficient?
It depends on your income level and priorities.
For your company:
Yes, PMI premiums can be classed as an allowable expense, reducing your Corporation Tax bill.
For you personally:
The value of the cover is added to your taxable income. So if you’re a higher-rate taxpayer, the cost might outweigh the corporate benefit. If you’re on a basic rate, the balance could work in your favour.
It’s not a straight yes or no
it’s about what makes sense for you.
What Are the Alternatives?
You can also choose to:
Pay for PMI personally
You’ll avoid the Benefit in Kind charge, but won’t get Corporation Tax relief.
Adjust your policy
To reduce premiums, consider:
- A higher excess
- Limited outpatient cover
- A “six-week wait” option (where private care kicks in only if the NHS wait exceeds six weeks)
The goal is to strike a balance between protection and cost.
Private medical insurance can offer peace of mind especially when your time is tied up with running a business.
Whether you pay for it personally or through your company, the key is understanding how each option affects your tax and overall finances.
Unsure what’s best for your business?
Speak to Demsa Accountants today we’ll help you make a tax smart decision.
Want to explore other ways to reduce your tax bill while staying compliant?
Have a look at our blog post on Year-Round Tax Optimisation: A Modern Approach, packed with practical tips for UK businesses.
