Private medical insurance

Arranged by employee, paid by employer

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Usually, if employer arranges and pays for insurance: 1) Employer pays Class 1A 2) Employee pays Income Tax 

How does it change if employer pays for insurance arranged by employee?

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By tom123
24th Aug 2016 18:57

If the employer is making a payment that should be paid by the employee then that is simply additional net pay.

Salary should be grossed up accordingly, with the net payment shown as a deduction and the balance being the salary net pay.

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RLI
By lionofludesch
25th Aug 2016 12:06

Can you confirm my inference that the contract is between employee and InsCo?

"Arranged by" could be ambiguous.

If I'm correct, I agree with Tom.

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By Igor Nankun
25th Aug 2016 11:28

It depends, but I also assume that the insurance contract is between the insurer and the employee.

If the employer pays the insurance company direct, then the amount paid is liable to Class 1 NIC and gets reported on the P11D.

If the employer reimburses the employee then the previous respondents are correct.

See page 80 of the employer's further guide to PAYE and NICs, here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

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