Question:
I am self-employed and pay for my own health insurance every month. Can I deduct these premiums on my self-assessment tax return, and are there any limits or rules I need to be aware of?
Arthur Weller replies:
See HMRC’s guidance in its Business Income Manual at BIM45560; unfortunately, the payment of these monthly premiums for personal health insurance is not an allowable business expense. The reason is that it is not considered to be 'wholly and exclusively' for the needs of the business (see BIM37660). However, a corollary of this is that the benefits payable under such policies are not trading income and are therefore generally tax-free (see BIM45560).
