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Health benefits and expenses which are exempt from tax

There are a number of health benefits and expenses which can be offered by an employer to their employees, without the employer being required to report these to the HMRC, pay tax or pay National Insurance on them.  Where these exemptions or concessions apply, the employee’s tax is not affected, and the payments or expenses do not need to be shown on an employee’s P11D.  This may sometimes be relevant when employees are referred to occupational health and our reports contain recommendations, which could entail cost to the employer.

Disabled people

As an employer, if you provide equipment or services to a disabled employee so they can do their work, it doesn’t count as a taxable expense or benefit.  If equipment or services are provided to one disabled employee, there is a requirement to offer it on similar terms to any other employee who becomes disabled.  Even if equipment is used outside work as well as at work, no tax charge arises.  This can apply to the provision of equipment such as wheelchairs or hearing aids. 

Travel for disabled people between home and work

Payments to assist people who have substantial and long term disabilities, with the cost of travelling between home and work, or to and from work related training, or to reimburse travel expenses, is non-taxable. If an employer provides a car with adaptations to an employee with a disability, including automatic transmission where this is necessary, this is exempt if the only private use of the vehicle is for journeys between home and work or travel to work-related training.         

Medical treatment to help an employee to return to work

If a health care professional assesses an employee as being unfit to work due to injury or ill health for at least 28 consecutive days or the employee has been absent from work at least 28 days, medical treatment to help the employee to return to work is exempt from tax, if the employer pays up to £500.  The health professional must be a registered medical practitioner, such as an occupational health advisor or physician.

Welfare Counselling

Welfare counselling services for employees are excluded, providing these are available to all employees and are specifically for welfare issues such as bereavement, ill health, stress, problems at work, sexual abuse, or personal relationship difficulties.  The exemption does not apply for counselling that offers tax advice, legal advice, financial advice other than for debt problems, advice relating to leisure or recreation or for medical treatment (other than counselling services such as cognitive behavioural therapy (CBT) or interpersonal therapy). 

Periodic medical checks or Health Screening

Only one medical check, which does not include treatment, and one health screen are exempt from tax per year.  Health screening is an assessment to identify employees who might be at particular risk of ill-health.

Eye Tests

Eyesight tests are exempt from tax payment for those employees who are required to work at a screen or monitor. 

Training payments

This exemption covers the costs borne by employers of work-related training and this extends to activities such as first aid, health and safety in the workplace and employee development schemes. The exemption includes travel and subsistence expenses to the same extent as if the employee were undertaking employment duties. 

References:

https://www.gov.uk/expenses-and-benefits-a-to-z

https://www.gov.uk/government/publications/non-taxable-payments-or-benefits-for-employees-hs207-self-assessment-helpsheet/hs207-non-taxable-payments-or-benefits-for-employees-2019


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