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HMRC internal manual

Employment Income Manual

Particular benefits: medical expenses, treatment and medical insurance: general

A person who is a director or an employee (except for 2015/16 and earlier one in an excluded employment (see EIM20007)), is chargeable on the benefit received where:

  • the employer, or somebody acting on behalf of the employer, contributes to a medical insurance scheme such as those operated by BUPA and PPP and
  • he or she is, or members of his or her family or household are, covered by the insurance policy.

Each director and employee is chargeable on:

  • the premium paid in respect of himself or herself, or members of his or her family or household (see EIM21763 for how to apportion a group premium) less
  • any part of the premium that he or she makes good (see EIM21120).

There is an exception in respect of insurance against the cost of certain medical treatment outside the United Kingdom (see EIM21766).

For 2015/16 and earlier only, employees who are in an excluded employment are not chargeable on premiums paid in respect of them unless they can choose to give up the benefit of medical insurance and receive a higher cash wage or salary (see EIM00570). This is because the employee does not possess anything that can be converted into money. The employer is not discharging the employee’s debt.

See EIM21764 where the insurance also covers retired employees.

As regards schemes sometimes called “in-house insurance schemes” see EIM21772.