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Private health insurance for the self-employed

Entrepreneurship abounds in the UK, with thousands of sole traders, freelancers and business owners free to work on their own time.

There could also be financial benefits. In fact, many self-employed people reap the financial rewards that can come from deducting expenses like private health insurance from their tax bill.

But it's not just about the freelancers - many company directors provide private healthcare to their employees and can take advantage of tax deduction provisions as well.

What does private health insurance cover for the self-employed?

Private health insurance can play an important role in your financial planning, especially if you are self-employed because you will not receive statutory sick pay (SSP) to stay active.

It gives you quick access to specific treatments in addition to NHS services, with the idea that you can get back to work faster if you are recovering from an illness or injury. Depending on the terms and conditions of your policy, private health insurance can provide you with:

  • Shortening waiting times
  • Inpatient and Outpatient Coverage
  • Access to professional consultants
  • A selection of hospitals
  • Cancer coverage (or even expanded cancer coverage)
  • Conditions related to the heart

Keep in mind that private health insurance will not pay out of pocket to cover the loss of your income, which is why many choose to choose income protection insurance in conjunction with private health insurance coverage.

What is not covered?

While private health insurance can give you fast and reliable access to some health care treatments, it may not cover some things, including:

  • Sick days
  • Legal sick pay (SSP)
  • Cosmetic procedures
  • Certain situations become chronic
  • View
  • Deafness
  • Development problems

Some conditions may also have set specific amounts for the duration of the policy, so it's helpful to make sure the policy meets your expectations, and this is easier if you work with an expert.

Do I need income protection insurance?

Income protection insurance can be a great asset that you can have alongside private health care because it can pay you a monthly income in case you are unable to work.

This is especially important for people who are self-employed, so it is important to consider your options in case you are unable to earn an income. You can choose a long-term plan that will generally cover you until you can go back to work, or a short-term policy that lasts one or two years and can cover your income and possible debts.

How does private health insurance affect my taxes?

The ability to deduct taxes from private health insurance as a business expense depends on the type of business you have. In some cases, you may be able to deduct certain costs from your tax if the transaction you received was for business reasons only.

See below for more information:

Director of a limited company

If you provide private healthcare to your employees through a limited partnership, it will be classified as a business expense and you can claim tax exemption.

Sole distributor with employees

As a sole proprietor, you can deduct private health insurance from your taxes as a business expense.

Sole distributor without employees
Unfortunately, you will not be able to claim the tax exemption because it is classified as a personal expense.

for your private account

Once again, private health insurance will be classified as a self-employed outlay.


If you are a contractor that operates through your PLC, the business can pay your health insurance costs. However, you will have to offset the cost of any premium with corporation tax because it is considered a P11D advantage (or benefit in kind). Your company will also have to pay contributions to the Employers' National Insurance of 13.8% of the profits.

Should I purchase my health insurance through my limited partnership or personally?

It depends on which option is more efficient from a tax point of view. While you might think that purchasing health insurance through your limited partnership could give you more tax benefits, the truth is that you could end up paying more.

For example, if you buy a health insurance policy for £ 1,200 a year, your company will also have to add an additional 13.8% on top of that number to meet the National Insurance Category 1A requirements. While you can get tax exemption on this lump sum, you will also have to pay corporate taxes in addition to personal taxes. If you pay for private health insurance in person, you will not have to pay national insurance or corporation tax.

Can Limited Partnership Managers Pay For Private Health Insurance For Their Employees?

Many business managers offer private health insurance to their employees as a benefit within their employment contracts. In fact, Laing and Buisson's figures show that employers spent £ 2.56bn on health coverage in 2011 alone.

In light of common themes such as mental well-being, there has been a shift in focus at British companies as many make an active effort to improve employer-employee relations.

Offering benefits like private healthcare is believed to:

  • Attract the best employees
  • Reduce sick days
  • Reduce time of absence
  • Improving employee morale

Where can I find private health insurance if I am self-employed?

For more information on tax-exempt private health insurance, it is best to seek professional advice.

It can be difficult to get expert advice for such a specialized area, but we work with a select group of insurance advisers who can recommend the best plans for the self-employed.