Health insurance through job

[Littlebluedinosaur]

I’m starting a new job and they’ve offered health insurance through it. It’s with Axa. Does anyone know what they likely tax issues are with a work benefit like this?

I believe it depends on the specific circumstances of the employment

If it was me I'd ask the employer to be sure.

Medical insurance has to be declared on your P11D, you will pay tax on the benefit.

There aren’t tax issues per se - you’ll ‘just’ pay tax on it as it’s seen as a benefit in kind.

My AXA is listed on my p11d and I pay tax upon the benefit.

Say you're on £30k plus health insurance that costs the company £1k per year. Instead of paying tax on £30k, you'll pay it on £31k because essentially that's the total payment you're earning from your employer.

Anyone have a rough sort of amount this will add then?

You need to ask your employer. It depends on the policy.

20% of the value of the benefit if you are a lower rate tax payer

my employer also offers Axa health insurance and the tax is deducted similar to income tax. For example, you earn £30k and the insurance premium the employer pays to Axa is £2k, you pay tax on £32k.

So it means you pay more tax than if you earn only £30k without the £2k health insurance benefit. £2k is often taxed at 20% so you pay an extra £400 of tax a year.

Many people opt out of insurance because they cant see the benefit of paying £400 a year. Some will stay because they see the benefit of private health insurance.

My partner has private health insurance for all of us through work (2 adults 2 children). It's bupa but the P11D value last year was about £2,000. I think our second child added about £300 so I would guess it's roughly £800 each for us adults and £300 for the kids. It's quite a comprehensive policy at his company and we have £100 deductible.

It depends on the policy. If your health insurance costs £1000 for the year then you will pay tax on £1000 at whatever your marginal tax rate is.

If it is just health insurance for you and no family members then ime it costs around £450-550 per annum. So you would pay tax on that.

Whatever it is I'd grab it with both hands. The NHS isn't getting any better. Question is whether you can afford not to take it. One example - friend lone parent with children full time worker needed gall bladder removed. In absolute agony. NHS cancelled her surgery as non urgent twice. Got it taken out by consultant privately. Afterwards he told her that if it hadn't been taken out when it was, it was getting so bad she'd probably have needed open surgery instead of keyhole ( costing nhs much more in end!) and incapacitating her for much longer.)
Often such insurance even includes access to online GP such as 'doctor at hand' which is fab for repeat prescriptions or if you can't get nhs appointment quickly (or at all).

@EvelynBeatrice I’ve signed up but not heard anything about the tax value of it. It’s only for me so I’m wondering if I should get private coverage for the rest of the family elsewhere.

Ask if work will let you add your family to the policy via your options and you pay for it

Is the tax taken at source or do I pay it separately?

The tax is either paid as you use or your employer will tell HMRC that you get Med insurance and your tax on it will be paid in arrears

It will be a deduction out of your monthly / weekly pay like all other tax. Contrary to post above, I have not heard of it being paid in arrears.

@Aprilx Our employees pay in arrears - whether you have heard of it or not is irrelevant- it’s a legitimate method of paying tax.

In our scheme with AXA the premium is based on age and your monthly premium is about £1 per year of age, so if you're 30 that's £30 a month. You pay tax on that so £6, or £12 if you're on higher rate tax. That's a really comprehensive scheme that includes optical and dental cover, an online GP system, self referral for physio, all sorts. It's well worth it!

And you usually start paying the tax as soon as you join the scheme. HMRC working so far behind is rare now as the Payroll systems mostly report to them in real time and your tax code is updated quicker.

Check the policy. Ours doesn't cover normal pregnancy, menopause or various chronic conditions like diabetes. Not quite sure what the point of it is...

Thank you. I'll check but it's a large organisation so I assume if there was anything for me to do they would have told me.

@Answerthedoor if you are paye tax is paid in real time. Legally we have to report benefits in kind monthly.

Tax on employment income (and benefits) is not paid in arrears.