Medical expenses

Medical expenses

Medical benefits
A company can provide several tax-free medical benefits to its employees that are tax-free. They all have various conditions to be classified as exempt from tax.
 
Free medical check-up
An employee is permitted to have one free medical check-up a year. This must not be for reviewing existing conditions and will not include any treatment.
 
Eye tests and VDU glasses for work
Eye tests where the employee uses computers and VDU glasses, where used wholly for business, are exempt benefits. The provision or payment by an employer towards the cost of glasses for general use, including use with a VDU, but without a special prescription for VDU will give rise to a taxable benefit.
 
Medical treatment/travel insurance outside the UK when on business
If an employee is working overseas, the cost of any unexpected healthcare and treatment can be paid for by the company. It should be paid directly by the company. Likewise the cost of insuring against this is permitted, but if the cover includes households members who are not employees it will be a taxable benefit on the employee.
 
Medical bills for injuries directly related to occupation
A good example would be treating injuries sustained as a professional footballer. An injury incurred during the course of work, such as a tree surgeon falling out of a tree and breaking a leg, would also be allowable.

Duality of purpose
However, where there is ambiguity surrounding injuries that could be caused outside of work or made worse by a tax-payers occupation, the burden of proof is on the taxpayer to prove that any private benefit is unavoidable or minimal.
 
For example, HMRC will permit a claim for nutritional advice for a professional athlete as this is closely connected to their income and part of the costs of their coaching. The same consultant and advice are unlikely to be permitted for a contractor working in IT who is a member of their local athletics club.
 
Chiropractor expenses for something like back pain are trickier, as it would depend on whether the back problem was really caused by the employment. HMRC may be more favourable to a bricklayer, while they would likely dismiss the same expense for an office worker. In the Parsons V HMRC (2010) case, a stuntman won his case to claim for expenses incurred on operations on his knee, chiropractor costs for his back and even dental treatment as all caused by his vocation, but his claim for maintaining his fitness, including boxing classes, was denied as not sufficiently connected to his work.
 
Medical treatment of up to £500 if previously assessed as unfit to work for 28 days
This would require a doctor’s certificate to show that the employee could not work.
 
Welfare counselling
There are various areas that are exempt as a taxable benefits. Most of these concern crisis situations, and advice on things like tax or legal advice is not permitted. For more information, please see the HMRC manual here.

Relevant life policies
These are tax-free. Please see our article here.​
 
Health insurance -a taxable benefit – but may be worth it
Health insurance is a taxable benefit, but companies' premiums are often significantly lower than what is priced for individuals. While you will be liable for tax on these if you can get a discount of at least 20% on any package offered to individuals, taking out the policy through the company will likely be cost-effective. It would be best to discuss this with your account manager before signing up for any policy to see if it is tax efficient.
 


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