Health and Wellness Expenses: What Can Your Business Actually Pay For?

Looking after your health has never been more important. Whether it's a trip to the optician, a physiotherapy appointment, private medical insurance or counselling, many of us invest in our wellbeing to stay healthy, productive and able to work.

When it comes to tax, one of the biggest questions we hear is "Can I put that through the business?" As with so many areas of bookkeeping and tax, the answer is rarely a simple yes or no. It depends on who you are, what the expense is, and why it's being incurred.

Let's demystify health and wellness expenses and explain what sole traders, company directors and employees can and can't usually claim.

The golden rule for health and wellness expenses

Before we dive into the different expenses, there's one principle that's worth remembering. HMRC generally distinguishes between expenses that:

• Support someone in carrying out their work.

• Treat or improve someone's personal health.

The first may qualify. The second often doesn't. It's a subtle difference, but an important one.

Sole traders vs limited companies

This is where many people are caught out. As a sole trader, you and your business are legally the same person. That means most healthcare costs are considered personal expenses, even if staying healthy helps you run your business.

A limited company is different. The company is a separate legal entity, so it can sometimes provide health-related benefits to directors and employees. However, some of those benefits may create a Benefit in Kind (BIK), meaning there could be tax implications for the individual receiving them.

Let's look at some common examples.

Private medical insurance

Sole trader

❌ Usually not allowable.

Even if private healthcare helps you get back to work sooner, it's generally considered a personal expense.

Limited company director or employee

✔ The company can pay for private medical insurance.

• It's usually an allowable business expense for Corporation Tax.

• It is normally treated as a Benefit in Kind for the director or employee.

• It will usually need reporting through payroll or on a P11D (depending on how benefits are dealt with).

Example

Sarah runs a limited company. The company pays £800 a year for private medical insurance.

The company receives Corporation Tax relief on the cost. Sarah may have tax to pay on the benefit because it's treated as part of her employment package.

Health cash plans

Health cash plans reimburse smaller healthcare costs such as:

• Dental treatment

• Optical costs

• Physiotherapy

• Prescriptions

Sole trader

❌ Usually a personal expense.

Company director or employee

✔ The company can usually pay for a health cash plan. However, like private medical insurance, it's generally treated as a taxable benefit unless a specific exemption applies.

Eye tests and glasses

This is probably one of the biggest areas of confusion. Many people have heard "My glasses are tax deductible." The truth is they are sometimes but not always.

Eye tests

If an employee or director regularly uses display screen equipment (such as computers) as part of their work, the employer can pay for an eye test. This is generally exempt from tax.

Glasses

If the eye test identifies that special corrective appliances are needed specifically for display screen work, the employer can usually pay for those glasses without creating a taxable benefit. However...

Ordinary prescription glasses or contact lenses that you would need regardless of your job are considered personal.

Sole trader

Even if you spend all day at a computer, your routine eye tests and everyday glasses are generally not allowable business expenses.

Example

James spends eight hours a day working on a computer. He needs new glasses because his everyday prescription has changed.

❌ Personal expense.

Now imagine an eye test confirms he specifically needs corrective glasses for intensive screen work.

If he's an employee or company director and the employer pays for them, they may qualify under the exemption. A small difference in circumstances makes a big difference in the tax treatment.

Physiotherapy

Physiotherapy is becoming increasingly common, particularly in physically demanding jobs.

Sole trader

❌ Usually not allowable.

It's considered treatment for your personal health.

Company director or employee

It depends. If it's simply private treatment arranged by the individual, it may create a taxable benefit if the company pays. However, physiotherapy recommended through Occupational Health as part of helping someone remain in or return to work may qualify for tax exemptions in certain circumstances.

Example

An employee injures their back lifting at work. Occupational Health recommends physiotherapy to support their return. The employer arranges and pays for the treatment. Depending on the circumstances, this may qualify for an exemption.

Counselling and mental health support

Thankfully, conversations around mental health have become much more open in recent years.

Many employers now provide support through:

• Counselling

• Cognitive Behavioural Therapy (CBT)

• Employee Assistance Programmes (EAPs)

• Stress support services

The good news is that certain employer-provided counselling services can be exempt from tax where they are intended to help employees deal with issues affecting their work. This can include support for:

• Workplace stress

• Anxiety

• Depression

• Bereavement

• Other wellbeing concerns

Sole trader

If you're paying privately for counselling yourself, it's generally a personal expense.

Occupational Health

Occupational Health is different from general healthcare. Its purpose is to assess someone's ability to carry out their work safely and effectively. Examples include:

• Return-to-work assessments

• Workplace adjustments

• Fitness-for-work reports

• Medical recommendations

These are generally employer-related costs and are often allowable business expenses.

Flu vaccinations

Seasonal flu vaccinations can often be provided by employers without creating a taxable benefit, particularly where they're offered to all employees to help reduce sickness absence. It's a small cost that can have a surprisingly positive impact on workplace wellbeing.

Annual health checks

Routine health screening is another area where treatment depends on the circumstances. Employers can usually provide one health screening assessment and one medical check-up per employee each tax year without creating a taxable benefit. Any additional health screenings may become taxable.

What about gym memberships?

This one deserves a mention because it's another popular myth.

Sole trader

❌ Personal expense.

Company

The company can pay. However, it will almost always be treated as a taxable benefit unless it falls within a specific exemption, such as an on-site workplace gym that meets HMRC's conditions. Sadly, joining the gym because "healthy directors make better business decisions" doesn't make the membership tax deductible. If only it were that simple!

Benefit in Kind. What does that actually mean?

A Benefit in Kind simply means someone receives a personal benefit because of their employment.

• The employer may receive Corporation Tax relief for providing it.

• The employee or director may then pay tax on the value of that benefit.

It's important to remember: A business expense isn't always tax-free for the individual receiving it.

That's why it's worth checking before assuming the company should pay.

A quick comparison

Expense	Sole Trader	Director/Employee
Private medical insurance	❌ Usually no	✔ Company can pay, usually a Benefit in Kind
Health cash plan	❌ Usually no	✔ Usually a Benefit in Kind
Routine eye test	❌ Usually no	✔ May qualify if required for display screen work
Everyday glasses	❌ No	❌ Usually no
Display screen glasses	❌ No	✔ May qualify
Physiotherapy	❌ Usually no	✔ May qualify depending on circumstances
Counselling	❌ Usually no	✔ Certain employer-provided counselling may be exempt
Occupational Health	N/A	✔ Usually allowable
Flu vaccination	❌ Usually no	✔ Often exempt
Annual health check	❌ Usually no	✔ One per year usually exempt

Final thoughts

Looking after your health is one of the best investments you can make but that doesn't automatically make it a business expense. The key question isn't "Does this improve my health?"

It's "Is this supporting me as a person, or supporting me in carrying out my role at work?"

That small distinction explains why some expenses qualify, some create a Benefit in Kind, and others remain personal.

While it might be disappointing to discover that your new glasses or gym membership aren't suddenly tax deductible, understanding the rules means you can make informed decisions and avoid unexpected tax surprises later. When it comes to health and wellbeing, looking after yourself is always worthwhile. You just can't always ask HMRC to contribute.