As a limited company owner, what health-related costs (such as medical insurance, eye tests, gym memberships and private health checks) are allowable for tax purposes against your company?
Although you can claim for gym membership via your company, a benefit in kind (BIK) charge will arise against the employee, and Class 1A NICs will be payable by the company on the total cost of the membership. Understandably, there is certainly a personal benefit from having gym membership, and you’d find it hard to claim that this was a purely business expense!
As with many other expenses, it would be hard to prove that health insurance was required purely for business purposes, so although the company can pay for this type of cover, the employee will attract a BIK charge for the privilege, as well as employers’ NIC on the total value of the benefit.
You may decide to take out a permanent health insurance (PHI) policy through your company rather than personally to provide you with an income should you be unable to work. This is an allowable business expense, although you may be personally liable to pay income tax and NICs on any funds received via your income protection policy should you need to make a claim.
The costs of eye tests for employees is allowable, and does not attract a BIK charge. The expense is allowable if the employee is required to use a computer, however the cost of glasses or contact lenses is not allowable, as the individual would already have to bear the costs themselves.
Private Health Checks
Directors and employees can claim for the cost of one private health assessment or health screening each year without attracting a BIK charge.
Overseas Medical Costs
These costs can be claimed legitimately if charged directly to the company and arranged in advance, and if the employee was abroad on business when treatment was needed.
Other Medical Treatment
If you require medical treatment due to injuries or diseases sustained or contracted as a result of your work, these costs are also tax-deductible.
For in-depth guides to the tax treatment of medical expenses and insurance, read HMRC’s guidance here.
You should consult your accountant and/or financial advisor if you have any questions relating to claiming medical or insurance expenses.