Health Insurance for Company Directors UK

Company directors can buy PMI personally or have the limited company pay the premium. Company-paid cover is usually reported on the director's P11D as a benefit in kind (or payrolled), the director pays income tax on the cash equivalent, and the company pays Class 1A National Insurance — currently 15% for 2025/26 and 2026/27 ([gov.uk](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2025-to-2026)). PremierPMI does not give tax advice — always confirm the treatment for your circumstances with your accountant.

Who this is for

This guide is for UK company directors — sole directors of a personal service company, directors of small family businesses, and directors of larger SMEs — deciding whether to buy private medical insurance personally or have their limited company pay for it.

It covers how the policy itself works and, at a high level, how HMRC treats company-paid medical insurance. It is not tax advice: the right structure depends on your company's profits, your salary/dividend mix and your personal tax position, and should be confirmed with your accountant.

Personal cover vs company-paid cover

A director can take out a PMI policy in their own name and pay the premium from personal, already-taxed income. There's no P11D entry, no benefit-in-kind charge and no Class 1A National Insurance, but the company gets no corporation tax deduction and the director funds the policy from net income.

Alternatively, the limited company can take out the policy and pay the premium directly. The premium is generally a deductible business expense for the company (subject to the normal 'wholly and exclusively' rule — gov.uk, company expenses you can deduct before paying Corporation Tax; HMRC BIM45525), but it's treated as a benefit in kind for the director, triggering income tax for the director and Class 1A NIC for the company. Either structure is legitimate; which is cheaper overall depends on individual circumstances an accountant should model.

How HMRC treats company-paid medical insurance

If a company arranges and pays an insurer directly for a director's medical insurance, it must report the cost on the director's P11D and pay employer Class 1A National Insurance on the value of the benefit (gov.uk, what to report and pay). The value used is the cost to the company of providing the cover (gov.uk, work out the value).

Instead of P11D reporting, a company can register to 'payroll' the benefit, taxing it through PAYE during the year rather than after year end — Class 1A NIC is still reported via a P11D(b) at year end either way (gov.uk, payrolling benefits and expenses). The director then pays income tax on the cash equivalent of the benefit at their marginal rate, through their P11D or payroll record, but — as with other benefits in kind — does not pay employee National Insurance on it.

For 2025/26 and 2026/27, the Class 1A NIC rate mirrors the secondary (employer) Class 1 NIC rate in force for the tax year in which the benefit is provided, currently 15% (gov.uk, rates and thresholds for employers 2025 to 2026; HMRC NIM15020). Directors and accountants should check the current gov.uk rates page each tax year, as rates are set by the Treasury and can change.

Corporation tax deductibility and exemptions

Insurance premiums paid for the benefit of employees and directors are generally an allowable revenue expense for corporation tax, provided they're incurred wholly and exclusively for the purposes of the trade and the benefit level is reasonable for the role (gov.uk, company expenses you can deduct before paying Corporation Tax; HMRC BIM45525). This is separate from the benefit-in-kind position on the director's own tax return — the company can usually deduct the cost while the director is still taxed personally on the value received.

A small number of health-related costs are specifically exempt from the benefit-in-kind charge, so they don't need reporting and don't attract income tax or Class 1A NIC. These include one health screening or medical check-up a year, medical treatment an employee needs while working abroad for the company, and recommended medical treatment up to £500 per tax year to help an employee return to work after at least 28 consecutive days' sickness absence, where specific conditions in section 320C ITEPA 2003 are met (gov.uk, what's exempt; HMRC EIM21774). General PMI premiums fall outside these specific exemptions and are reportable as described above.

• Allowable business expense: company PMI premiums, if wholly and exclusively for business purposes and reasonable for the role.
• Exempt from BIK: one annual health screen; medical treatment needed abroad on business; up to £500/tax year of recommended return-to-work treatment after 28+ days' absence.
• Not exempt: the core PMI premium itself — this is reportable on P11D (or payrolled) as described above.

Deadlines and reporting

Companies must report expenses and benefits, including company-paid medical insurance, and give employees a copy of the figures, by 6 July following the end of the tax year. Class 1A National Insurance must then be paid by 22 July (19 July if paying by cheque) (gov.uk, deadlines). If benefits are payrolled instead, tax is collected through PAYE during the year and only the P11D(b) Class 1A return is needed at year end.

Source: gov.uk, Expenses and benefits for employers: deadlines, checked 15 Oct 2026.

We don't give tax advice

PremierPMI is a health insurance broker, not an accountancy or tax advice firm. The information above summarises HMRC's published guidance on how medical insurance is typically treated, but your company's exact position — including whether payrolling or P11D reporting suits you better, and the net cost comparison between personal and company-paid cover — depends on your own circumstances. Please speak to your accountant or tax adviser before deciding how to structure and pay for director health insurance.

How PremierPMI helps

We compare 10+ leading UK health insurers for director and small-business PMI, explain how moratorium vs full medical underwriting applies to you and any family members (see our guide to moratorium vs full medical underwriting), and provide clear documentation — including the premium breakdown your accountant needs for P11D or payroll reporting. Browse our full list of UK health insurance providers we work with.

PremierPMI broker desk notes

• We're regularly asked by sole directors of limited companies whether to buy personally or through the company. We can explain how the policy and underwriting work, but we always point clients to their accountant for the tax comparison specific to their salary and dividend structure.
• Several of the directors we place cover for run the business and are the only employee — in that case the company-paid vs personal decision tends to come down to marginal tax rates and corporation tax position, again something for their accountant to model.
• When a company pays for family members alongside the director, we make sure the quote and renewal documents clearly separate each insured person's premium, since that's the figure the accountant needs for each person's P11D entry.
• We don't complete or submit P11D forms, and we aren't authorised to give tax advice — our role is sourcing and placing the policy, and keeping documentation client-ready for their accountant.

Common questions

Is company-paid private medical insurance a taxable benefit?

Usually yes. Unless a specific exemption applies, HMRC treats employer-paid (including director-paid-by-company) medical insurance as a benefit in kind. The company reports it on the director's P11D, or payrolls it, and the director pays income tax on the cash equivalent ([gov.uk](https://www.gov.uk/expenses-and-benefits-medical-treatment/what-to-report-and-pay)).

Does the company pay National Insurance on director health insurance?

Yes — the company pays employer Class 1A National Insurance on the value of the benefit, at the secondary Class 1 NIC rate in force for that tax year, currently 15% for 2025/26 ([gov.uk rates and thresholds](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2025-to-2026); [HMRC NIM15020](https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim15020)). The director does not pay employee NIC on it.

Can the company deduct the premium against corporation tax?

Premiums for employees and directors are generally an allowable business expense if paid wholly and exclusively for business purposes, reducing the company's taxable profit ([gov.uk, company expenses you can deduct](https://www.gov.uk/guidance/company-expenses-you-can-deduct-before-paying-corporation-tax); [HMRC BIM45525](https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45525)). Ask your accountant to confirm this applies to your company's specific policy and circumstances.

When does the P11D need to be submitted?

P11D and P11D(b) forms must be submitted to HMRC, and copies given to employees, by 6 July following the end of the tax year. Class 1A National Insurance must then be paid by 22 July (19 July if paying by cheque) ([gov.uk deadlines](https://www.gov.uk/employer-reporting-expenses-benefits/deadlines)).

Are there any exemptions from the benefit-in-kind charge?

Some specific health-related costs are exempt, including one health screening a year, medical treatment needed while an employee is working abroad, and up to £500 of recommended medical treatment per tax year to help someone return to work after 28+ days' absence ([gov.uk, what's exempt](https://www.gov.uk/expenses-and-benefits-medical-treatment/whats-exempt); [HMRC EIM21774](https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21774)). General PMI premiums themselves are not covered by these exemptions.

Is it cheaper to buy PMI personally or through my company?

It depends on your salary, dividends, company profits and personal tax band — there's no single answer. Company-paid cover avoids paying from already-taxed income but creates a P11D benefit and Class 1A NIC cost for the company; personal cover has no such reporting but no corporation tax relief. We recommend asking your accountant to model both for your situation.

Does PremierPMI give tax advice on director cover?

No. We compare 10+ leading UK health insurers, explain policy wording and help with the application and claims process, but we are not qualified to give tax advice. For how PMI affects your company's corporation tax, P11D or Class 1A NIC position, please speak to your accountant.

Can a sole director with no other employees still buy PMI through the company?

Yes. A sole director of a limited company is still an employee of that company for these purposes, so the same P11D, income tax and Class 1A NIC rules apply as for any other employee-director ([gov.uk](https://www.gov.uk/expenses-and-benefits-medical-treatment)).

Sources

• gov.uk — Expenses and benefits: medical or dental treatment and insurance (overview), https://www.gov.uk/expenses-and-benefits-medical-treatment (checked 15 Oct 2026)
• gov.uk — What to report and pay, https://www.gov.uk/expenses-and-benefits-medical-treatment/what-to-report-and-pay (checked 15 Oct 2026)
• gov.uk — Work out the value, https://www.gov.uk/expenses-and-benefits-medical-treatment/work-out-the-value (checked 15 Oct 2026)
• gov.uk — What's exempt, https://www.gov.uk/expenses-and-benefits-medical-treatment/whats-exempt (checked 15 Oct 2026)
• gov.uk — Rates and thresholds for employers 2025 to 2026, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2025-to-2026 (checked 15 Oct 2026)
• HMRC internal manual — NIM15020, Class 1A NIC percentage rate, https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim15020 (checked 15 Oct 2026)
• HMRC internal manual — EIM21774, recommended medical treatment to return to work, https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21774 (checked 15 Oct 2026)
• HMRC internal manual — BIM45525, insurance: employees and other key persons, https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim45525 (checked 15 Oct 2026)
• gov.uk — Company expenses you can deduct before paying Corporation Tax, https://www.gov.uk/guidance/company-expenses-you-can-deduct-before-paying-corporation-tax (checked 15 Oct 2026)
• gov.uk — Expenses and benefits for employers: deadlines, https://www.gov.uk/employer-reporting-expenses-benefits/deadlines (checked 15 Oct 2026)
• gov.uk — Payrolling: tax employees' benefits and expenses through your payroll, https://www.gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll (checked 15 Oct 2026)

PremierPMI is a UK private medical insurance broker specialising in whole-of-market placement across 10+ leading UK health insurers including Bupa, AXA Health, Aviva, Vitality, WPA, Freedom Health, The Exeter, General & Medical and National Friendly. FCA regulated (Tesha Family Ltd, FRN 1029667). Speak to a broker on 020 4525 0884, WhatsApp 020 4525 0884, or email contact@premierpmi.co.uk.