Employers are able to provide employees with a range of health and welfare benefits without giving rise to a tax charge under the benefits in kind legislation.
1. Health screening and medical check-ups
Employees can benefit from one health screening assessment or medical check-up each tax year free of tax. A health screening assessment is an assessment to identify employees who may be at particular risk of ill health, while a medical check-up is a physical examination of the employee by a health professional for the sole purpose of determining the employee’s state of health.
2. Eye tests and corrective appliances
Employees who are required to have an eye test under regulations made under the Health and Safety at Work Act 1974 (which is the case where employees use display screen equipment) must be provided with one by their employer. The provision of such a test does not constitute a taxable benefit. Similarly, if the test shows that the employee needs glasses or other corrective appliances, these too can be made available by the employer free of tax if they are provided solely for use for display screen work. However, the exemption only applies if the tests and corrective appliances are made available to all the employees who need them.
Where eye tests or glasses are provided or paid for by the employer in other circumstances, a tax liability will arise.
3. Recommended medical treatment
An employer is able to provide recommended medical treatment to an employee or reimburse the cost of such treatment up to the value of £500 without a tax liability arising. Recommended medical treatment is that recommended by a health professional for the purpose of assisting an employee to return to work after a period of absence due to injury or ill health. The treatment must be provided after an employee has been absent from work for at least 28 consecutive days.
4. Overseas medical treatment
While an employee is working abroad, the employer can meet the cost of any medical treatment that arises, and also the cost of medical insurance to cover the cost of overseas medical treatment, without triggering a tax charge under the benefits in kind legislation. However, the provision of medical treatment in the UK and private medical insurance are taxable benefits.
5. Welfare counselling
The provision of certain types of welfare counselling to employees is exempt from tax. Although the exemption is tightly drawn, it covers counselling for problems such as stress, work problems, debt problems, alcohol and drug dependency, career concerns, bereavement, equal opportunities, ill health, sexual abuse, harassment and bullying, conduct and discipline and personal relationship difficulties. However, advice on finance (other than debt problems), tax, leisure or recreation and legal advice are specifically excluded from the scope of the exemption.
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