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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
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Particular benefits: medical expenses, treatment and medical insurance: general

An employer wishing to pay an employee’s medical expenses may do so in a number of ways. The table at EIM01550shows the tax treatment that applies in each circumstance.

Liability under Part 3 Chapter 10 ITEPA 2003 arises on directors or employees (except for 2015/16 and earlier those in an excluded employment (see EIM20007)), where by reason of their employment:

  • the employer arranges to meet their hospital and other medical expenses or provide treatment directly. The expense may be met out of the proceeds of an insurance policy payable to the employer (see EIM21761), or
  • the employer pays the premiums under a group insurance policy covering employees, and sometimes their families (see EIM21762).

No liability arises in respect of periodic medical check-ups (see EIM21765).

As regards the cost of medical treatment outside the United Kingdom see EIM21766.

An Inspector should deal with any disputes over benefits relating to medical treatment or insurance.

Permanent Health Insurance (PHI)

For information on PHI see EIM06410.

For information on recommended medical treatment provided to help an employee return to work after a period of absence due to injury or ill health see EIM21774.