Tax breaks for occupational health up for review

  • Business Advice
a woman at a desk with paperwork and a calculator and a computer
Peninsula Logo

Peninsula Group, HR and Health & Safety Experts

(Last updated )

The Treasury is considering tax breaks for provision of occupational health services as it grapples with the large number of workers signed off on long-term sick

The consultation wants feedback on the case for tax incentives and specifically seeks views on providing further support through expanding the benefit in kind (BiK) exemption for medical benefits, to encourage greater employer provision of occupational health services.

Only 45% of workers in the UK currently have access to occupational health services, with fewer than 20% of those working for small businesses having any support. Government estimates that up to 6.5 million workers are economically inactive.

It is also considering whether another option would be to provide businesses with a super deduction on certain occupational health costs which would mean that the more money spent on the provision would reduce the overall corporate tax bill.

It seeks views on whether there is a case for expanding the existing exemption to provide relief for a greater range of costs in addition to recommended medical treatment funded by an employer to help employees returning to work, cost of annual health screening, welfare counselling and eye tests and glasses or contact lenses.

The consultation sets out various interventions which could be given tax relief, but ruled out any changes to tax relief on private medical insurance or wages for occupational health staff employed by the business.

The Treasury said that ‘expanding the scope would mean more treatments were eligible for tax relief and therefore businesses would face lower costs in providing these treatments’.

The existing rules could be extended to cover health screenings for employees, within a specific predefined limit; medical check-ups for employees; treatments that aim to reduce workplace absence or enable employees to perform better, including preventative treatments; and flu vaccinations, where paid for by the employee and later reimbursed by the employer.

However, it added that there could be drawbacks with expanding BiK reliefs, including cost to the Exchequer, deadweight loss where the employer would have provided the benefit anyway and limited changes to behaviour.

Income tax and National Insurance contributions are normally paid on benefits received by employees from their employer as part of their contract for work, unless it is a work related accident. Employers also pay NICs on the value of the benefit.

The closing date for comment is 12 October 2023.

If you have questions about health assessments for employees, visit BrAInbox today where you can find answers to questions like Do I need to do a health assessment for a night worker?

Construction director banned over £170k tax fraud

Overexposure to radioactive radon gas incurs fine for boarding school

Greek wildfires curb employees’ holidays

Gary Lineker – the return leg in IR35 case

Related articles

  • polling station


    What could a general election mean for employment law?

    Here's what the big three have each vowed to do should they come away with an election win.

    Peninsula TeamPeninsula Team
    • Employment Law
  • NIC


    Conservatives plan NICs abolition for self employed

    After a difficult week, PM Rishi Sunak has set out a raft of tax measures at the Conservative manifesto launch with plans to abolish main NICs rate for four million self employed workers

    Peninsula TeamPeninsula Team
    • Employment Law
  • Global survey results


    UK Lagging in Mental Health Conversations: A Wake-Up Call for Employers

    The UK is diverging from this global trend, with a 4% decrease in employees speaking out about mental health issues.

    Peninsula Team Peninsula Team
    • Business Advice
Back to resource hub

Try Brainbox for free today

When AI meets 40 years of Peninsula expertise... you get instant, expert answers to your HR and health & safety questions

Sign up to our newsletter

Get the latest news & tips that matter most to your business in our monthly newsletter.