Medical and dental treatment and insurance

Copyright © 2025 LexisNexis
Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

Medical and dental treatment and insurance

Copyright © 2025 LexisNexis
Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
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Introduction

The provision of medical related benefits to employees is one of the most common benefits provided by employers. If an employer provides insurance or pays for medical treatment for an employee, an income tax and NIC liability usually arises.

This guidance note sets out main points to consider in relation to employer health-related matters. In addition, the Client factsheet ― tax treatment of employer payments toward employee health issues provides a brief summary of some of the main points to consider, and may be adapted as an aide memoire, for use by clients who are responsible for organising or reporting relevant payments.

Medical insurance

An employer may take out a medical insurance policy to cover their employees, if so, such insurance cover is a taxable benefit. Insurance taken out to cover members of an employee’s family is similarly a benefit taxable on the employee.

Any claim made under such a policy for treatment is not a taxable benefit in itself as the taxable benefit arising to the employee is the insurance premium as

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  • 25 Nov 2025 10:43

Home/ Tolley Tax Guidance/ Employment Tax / Providing benefits to employees

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