Health screenings and medical check-ups

Your company can pay for certain health checks for employees without creating a tax charge.

HMRC allows one health screening and one medical check-up per employee per tax year to be provided tax-free, provided the conditions are met.

In this guide we explain:

• what qualifies as a health screening or check-up
• the rules that need to be followed
• what is not covered by the exemption

If you’d like to read HMRC’s guidance, you can find it here:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21765
https://www.gov.uk/expenses-and-benefits-medical-treatment/whats-exempt

At a glance

• One health screening per employee per tax year
• One medical check-up per employee per tax year
• Must be available to all employees
• Covers assessment and prevention, not treatment
• This wouldn't be classed as a benefit in kind if the rules are met

How it works

Normally, if a company pays for medical services for an employee or director, this would create a benefit in kind, meaning Income Tax and National Insurance may be due.

However, HMRC makes an exception for certain preventative health checks. Where the conditions are met:

• the company can pay for the service
• the cost is normally treated as a business expense
• there is no benefit in kind for the individual

This applies to both employees and directors. For a one-person company, the director is still treated as an employee for these purposes. The exemption is based on the personal tax year (6 April to 5 April).

What’s allowed

Health screening

A health screening is designed to identify potential health risks.

This might include:

• blood pressure checks
• cholesterol testing
• BMI or general health assessments
• lifestyle questionnaires

Medical check-up

A medical check-up is a general examination carried out by a qualified health professional to assess overall health. This typically applies where the individual is not already ill and does not require ongoing treatment.

The rules

To qualify for the exemption, the following conditions must be met.

1. One of each per employee per tax year

The exemption is limited to:

• one health screening, and
• one medical check-up

per employee per tax year.

Anything beyond this may create a taxable benefit.

2. The benefit must be available to all employees

The exemption only applies if the service is available to all employees. For a single-director company, this condition is naturally satisfied. If the company grows, the benefit should not be restricted to directors only.

3. It does not cover treatment

This is the most important point. The exemption applies to assessment and prevention, not treatment. If the service includes medical treatment, the entire cost may become a taxable benefit, even if part of it relates to a health check.

4. The company should pay directly

The company should pay for the service directly. If you pay personally and the company reimburses you, the exemption may not apply in the same way.

What’s not covered

Services that are typically not covered by this exemption include:

• physiotherapy
• counselling or therapy
• ongoing medical treatment
• any treatment linked to an existing condition

In these cases, the cost would usually be treated as a benefit in kind, with potential tax and reporting implications.

FAQs:

Can I use this as a director of a one-person company?

Yes.

A director is treated as an employee for this purpose, so you can use the exemption yourself, provided the conditions are met.

Can this be used for family members?

No. The exemption applies to employees only. Family members or partners are not covered unless they are genuinely employed by the company.

Does VAT apply?

Most health screenings and medical check-ups are exempt from VAT, so VAT is not usually a factor here.

Recording this in Mighty

If the company pays for the health check directly, you can categorise this as staff welfare. We would advise uploading the receipt for this also, so it's easier for us to get additional context when we're preparing your accounts. 

If you’re unsure whether something qualifies under this exemption, feel free to ask your dedicated accountant or contact us at support@mightyaccounting.com.