Consultation On Tax Relief For Occupational Health Services
On the 20 July 2023, the Government launched a consultation on tax relief for employers who invest in Occupational Health services for employees. The introduction of tax relief was initially announced during the Spring Budget in March 2023 which was largely focused on getting employees who are absent from work due to ill health or retirement back into the workplace in an attempt to boost economic growth.
It is estimated that around 2.6 million people are currently economically inactive, which is an increase of around 23% over the last decade. It is hoped that by introducing tax relief, employers will be more likely to invest in Occupational Health services for their employees and that providing further Occupational Health services to employees, will improve their health and wellbeing generally, resulting in improved attendance and productivity at work.
One of the proposals being considered by the Government as part of the consultation is to expand the scope of medical benefits covered by the current Benefits in Kind exemption. Under the current Benefits in Kind exemption, employers receive tax relief on the provision of some medical benefits to employees such as annual health screening, counselling and eye tests.
The Government is also considering the possibility of implementing alternative tax incentives for employers, such as a super-deduction that may apply to certain Occupational Health costs. In practice, this would mean that employers who spend more on Occupational Health services would have less tax to pay.
The specific details of the proposed tax relief and how this will work in practice are unknown at this stage. The Government is currently inviting responses from employers regarding its proposal and in particular if there are any alternative tax incentives that would be more effective. The consultation will close on the 12 October 2023.
The link for the Government consultation can be found below. Employers who do want to contribute their own views on the consultation should do so via the survey link on page 11 of the consultation.
Tax_incentives_condoc.pdf (publishing.service.gov.uk)
The Government has confirmed that their consultation on tax incentives for employers who invest in Occupational Health services should be read alongside the Department for Work and Pensions (DWP) and Department for Health and Social Care (DHSC) consultation on the role of the Government, Occupational Health Providers, and employers in increasing Occupational Coverage across the UK.
The link for the DWP and DHSC consultation can also be found below:
Occupational Health: Working Better (publishing.service.gov.uk)
Employers will no doubt welcome the news of tax relief potentially being introduced for Occupational Health services as this will assist with the cost of health services and hopefully improve employee attendance and engagement. It is however not yet clear how the tax relief will apply in practice and if any limitations will apply. We will continue to monitor the progress of the consultation and provide an update once the consultation results have been published.
How can we help?
Intermittent and long-term absences can become costly for businesses. For any further information or advice relating to sickness absence management and/or a disability related matters, or if you have a query on another area of employment law, please contact our Employment Law Team on 01246 555 111 or the details below.
If you want to hear more about employment law updates and changes, you can also find details of our other upcoming events here: Events | BRM Solicitors, Chesterfield (brmlaw.co.uk)
Amy Hallam, Head of Employment 0114 3496989 or email amy.hallam@brmlaw.co.uk
Ellie Leatherday, Associate 01246 564002 or email ellie.leatherday@brmlaw.co.uk
Jade Taylor, Trainee Solicitor 01246 564 058 or email jade.taylor@brmlaw.co.uk
