New legislation introduced from April 2026 now allows for employers to reimburse employees for the cost of routine flu vaccinations and eye tests.
Previously, an employer had to pay for all medical costs directly to the provider, in order for the expense to be exempt from income tax and national insurance.
However, this is a welcome change and now gives more flexibility for employers to reimburse employees incurring such costs.
Here is a guide of what kinds of medical expenses are exempt from income tax and national insurance for employees and company directors:
Eye tests
These are exempt if they are required by health and safety legislation for employees who use a computer monitor or other screen. The cost can be paid directly to the supplier or by reimbursement to the employee.
The law says employers must arrange an eye test for display screen equipment (DSE) users if they ask for one, and provide glasses if an employee needs them only for DSE use, but not if they are required for general reading and other everyday tasks. Any prescription issued will have to state they are for DSE work.
Only glasses prescribed for DSE work are exempt from income tax and national insurance, so there is no point company directors claiming back from their own company for their own personal costs of general glasses or reading glasses.
Flu vaccinations
These are now exempt whether or not an employer pays directly or chooses to reimburse an employee.
Periodic medical checks or health screening
An employer may pay a medical provider directly for the cost of these, but only one a year is exempt.
Medical treatment outside the UK
This is exempt if your employee is working for you overseas and needs treatment. You must have committed in advance to pay, unless you arrange and pay the provider directly for your employee’s treatment or insurance.
Medical treatment to help an employee return to work
This is exempt if you pay up to £500 for costs for an employee to return to work, but the employee must have either:
- been assessed by a health care professional as unfit for work (or will be unfit for work) because of injury or ill health for at least 28 consecutive days, or
- been absent from work because of injury or ill health for at least 28 consecutive days
Here is a link to HMRC’s expenses and benefits manual: https://www.gov.uk/expenses-and-benefits-medical-treatment/whats-exempt
