Short answer: No for sole traders and partners — HMRC treats personal PMI as failing the 'wholly and exclusively' business test, so premiums come from taxed income. Yes for limited companies — premiums are corporation-tax deductible — but the covered director or employee is then taxed on the premium as a P11D benefit in kind, and the company pays Class 1A NIC at 15% (2026/27). (Accessed July 2026.)
For who: self-employed workers and company directors pricing cover net of tax.
Reviewed by: Ben Darke, PMI Experts · Last updated: 2026-07-17
Reviewed by: Ben Darke, PMI Experts · Last updated: 2026-07-17
Key facts
| Sole trader / partner | No deduction — personal expenditure (HMRC Business Income Manual principle; AXA Health guidance agrees, accessed July 2026) |
| Limited company | Premium deductible against corporation tax as a staff cost |
| Employee/director side | Income tax on the premium value via P11D at marginal rate |
| Employer NIC | Class 1A at 15% of the premium (2026/27, gov.uk) |
| BIK-exempt items | One annual health screening; screen-work eye tests; up to £500 recommended return-to-work treatment after 28+ days' absence (gov.uk, accessed July 2026) |
| IPT | 12% Insurance Premium Tax applies inside every premium regardless of who pays |
Sources
gov.uk expenses-and-benefits: medical treatment (accessed July 2026); gov.uk CWG5 Class 1A rates 2026/27; AXA Health employer tax guidance (accessed July 2026).