Private Medical Insurance - Implications?

Albermarle

Some approx figures based on my experience.

5 * family cover with a small  employer 20 years ago. Cost was about £1800
3* family cover with a large employer 5 years ago . Cost was about £1100

I paid 40% tax on both. I was quite happy to pay it as to buy the same cover privately would have cost a lot more. So effectively was getting £2500 to £3000 worth of cover for a cost of around £500 in tax .

uknick

400ixl said:

This is typically that the company adds the cost of the Private Medical policy to your gross salary (it can only be used for this purpose), but you still have to pay the tax and NI on that benefit value.

You can turn down the benefit, but must do this formally so that they do not pay the money and therefore you do not get taxed.

You don't pay NI on BIK unless it's paid as cash to you.  Employer's do pay NI on the BIK. 

uknick

Albermarle said:

Some approx figures based on my experience.

5 * family cover with a small  employer 20 years ago. Cost was about £1800
3* family cover with a large employer 5 years ago . Cost was about £1100

I paid 40% tax on both. I was quite happy to pay it as to buy the same cover privately would have cost a lot more. So effectively was getting £2500 to £3000 worth of cover for a cost of around £500 in tax .

If you're paying 40% it would have cost you £1,000 not £500 on a £2,500 premium.  But, as you say it's a no brainer for most people and has been for many, many decades, as you post indicates.

Albermarle

uknick said:

Albermarle said:

Some approx figures based on my experience.

5 * family cover with a small  employer 20 years ago. Cost was about £1800
3* family cover with a large employer 5 years ago . Cost was about £1100

I paid 40% tax on both. I was quite happy to pay it as to buy the same cover privately would have cost a lot more. So effectively was getting £2500 to £3000 worth of cover for a cost of around £500 in tax .

If you're paying 40% it would have cost you £1,000 not £500 on a £2,500 premium.  But, as you say it's a no brainer for most people and has been for many, many decades, as you post indicates.

I was paying tax on what the employer paid for my private cover, so it was about £500.

If I had bought the cover privately it would have cost much more. 

So effectively I was getting around £2500 worth of cover for a cost ( paid in tax ) of £500

EnPointe

silvercar said:

Would you otherwise take out PMI yourself? In which case it is a big saving as you'll only pay the tax on the (often reduced) cost, rather than paying it all yourself. There are other gains by being part of a company PMI scheme:
1. On claims the insurer quibbles less than on private insurance as they want to safeguard the business.
2. The business will often pay less per person than it would cost you yourself, so you will be paying the tax on a lower amount.

If you wouldn't otherwise take out PMI, then you would now have the benefits of the insurance. Often quicker access to health care, sometimes a private online GP/ nurse available for minor ailments or referrals, private funding for treatments that the NHS either won't provide or have a long waiting list for.

There are some corporate schemes that cover stuff that  ordinary retail Private medical cover wouldn't cover  ( and get the anti woke  cured pork product faction  frothing  and boilding their  wee wee)