Expenses and benefits: medical or dental treatment and insurance
What to report and pay
If the medical or dental treatment or insurance you provide isn’t exempt, you must report it to HMRC and may have to deduct and pay tax and National Insurance on it.
You arrange and pay the provider directly for treatment or insurance
You must:
- report it on form P11D
- pay Class 1A National Insurance on the value of the benefit
Your employee arranges treatment or insurance, but you pay the provider
You must:
- report it on form P11D
- add the value of the benefit to the employee’s earnings when deducting and paying Class 1 National Insurance (but not PAYE tax) through payroll
You reimburse your employee’s costs
This counts as earnings, so:
- add the payments to your employee’s other earnings
- deduct and pay PAYE tax and Class 1 National Insurance through payroll
The same rules apply whether you provide your employee with a cash allowance or additional salary to meet medical costs.