Tax considerations in respect of providing Private Healthcare
The information below is designed as a guide only and is based upon current UK tax legislation in force at December 2025 which may change at any time. For advice on specific cases, you should always seek independent tax advice.
Where non-cash benefits (such as Benenden Healthcare for Business) are provided to employees, these are classified as being a Benefit-In-Kind (BiK) and are typically reported via a Form P11D/ P11D (b) to HMRC.
Will employees need to pay tax on their private healthcare cover benefit?
Yes, employees will pay tax on the value of the BiK.
Will employers need to pay tax or National Insurance Contributions on providing private healthcare cover to employees?
There will be no tax for employers to pay (as this is paid by the employees), however employers will have to pay Class 1A National Insurance Contributions (NIC) on the value of the BiK.
This is assuming a contract is in place between the employer and Benenden Health and the employer is paying Benenden Health directly for the benefit. You should seek tax advice on the reporting requirement if a different arrangement is in place.
At December 2025, the Class 1A National Insurance rate is 15% (please note, this rate may change at any time).
Worked example
Benenden Healthcare for Businesses currently costs £186, per employee, per year. Assuming the employee does not make any contributions towards this cost (i.e. the employer fully pays for this), the BiK associated with the provision of the benefit would be £186 per employee, per year. The cost per employee is the same for everyone, regardless of age or medical history. The following tables provide an example of the tax and National Insurance cost of providing Benenden Healthcare for Business for a basic rate taxpayer and a higher rate taxpayer. Please note that these tables are guides only. Advice should be sought for specific cases.
Basic Rate Taxpayer
| Annual tax paid by employee (20%) | £37.20 |
| Annual Class 1A NIC paid by employer (15%) | £27.90 |
High Tax Band Payer
| Annual tax paid by employee (40%) | £74.40 |
| Annual Class 1A NIC paid by employer (15%) | £27.90 |
Moving forward
Currently, benefits such as Benenden Healthcare for Business can be reported via a Form P11D/ P11D (b). Please note that from April 2027, HMRC is mandating the payrolling of BiK’s.
This change will not impact the amount of tax or National Insurance Contributions due, however it will change how Benenden Health for Business will need to be reported to HMRC and the timing upon when the tax and NIC becomes due. If required, please seek independent advice.