Work Supplied Medical Benefit and Tax Code

Quick question, my work provides medical cover. I see that as a payment along with my gross salary on my pay slip.

Having just completed a Self Assessment, my tax code for the year has been recreated, lowering my personal allowance as they have taken a deduction in that for my medical insurance.

Surely this is not correct as on my payslip I see it as payment, then any tax required to be paid on it will be paid at this point? Not at a later date by reducing my personal allowance.

Thanks in advance