Income Tax on Private Health Insurance
Not So Kind Benefit
Being taxed on private health insurance, what exactly is that all about? I pay full National Insurance Contributions, probably much more than most people who use the National Health Service (NHS) a lot more than I do. So exactly why am I penalised because my company provides me with private healthcare cover?
OK, I fully get that it is technically a benefit in kind (BIK) and that the HMRC are constantly vigilant for sneaky ways that employers may compensate workers rather than paying them taxable £££. However, my private health cover means my treatment gets paid for in full. I don’t use the NHS a lot anyway but certainly not as much as I otherwise might if I was not privately.
Taxed on Private Health, Still Pay For The NHS
I’ve had two knee surgeries, various scans, a couple of lumps and bumps removed. My wife has had major back surgery, hand surgery and also a couple of scans. All private and all freeing up NHS resources to treat others. Surely I should at least get a refund on some of my National Insurance Contributions?
My private medical cover was on my P11D last year as a BIK of £3,771. That means the tax man treats me as if I have been paid that much in salary. At 40% tax rate that is £1,508 additional tax I have to pay or £125.66 per month on top of £440 per month National Insurance despite the fact I am reducing the load of the NHS!!
I try to keep myself healthy, I pay more than my dues but when you see people on drips outside a hospital smoking it makes you realise the government has the middle earners on PAYE by the short and curlies. May as well hand the government a jar of vaseline and bend over the desk!!