Autumn Statement 2013: The Autumn Statement 2013 has confirmed the government is to introduce a tax exemption on amounts of up to £500 paid by employers for medical treatment for employees. This was first announced in the Budget 2013,
In response to a consultation into how to implement the tax relief, the government also announced it will extend the exemption to medical treatments recommended by employer-arranged occupational health services, in addition to those recommended by its new health and work assessment and advisory service, announced in January 2013.
This announcement clearly demonstrates that government is, quite rightly, taking a long-term, joined-up approach to tackling sickness absence by providing tax exemptions that complement and encourage existing health and protection investments.
The proposed extension will likely support forward-thinking employers that invest up-front in services like group income protection, which not only provides return-to-work support, but also offers financial protection for staff if they are absent for extended periods.
We congratulate the government on listening to the industry and backing its words with firm action. We now look forward to hearing further details in the Finance Bill 2014.
The government’s announcement to extend the proposed tax exemption on employer-paid occupational health treatments is a positive development and should be welcomed by all. It is particularly pleasing to see that HM Treasury seems to have acknowledged representations from parties, including both Axa PPP Healthcare and the ABI, in proposing this change for inclusion in the Finance Bill 2014.
This proposal from HM Treasury should be particularly welcomed by employers that currently provide occupational health services to support their absent or ill employees. Previously, the tax exemption was only linked to treatments recommended by the new Health and Work Service and so there was the potential for a tax inequality to emerge between employees being supported by their employer’s occupational health service and the new Health and Work Service.
Going forward, this amendment to the benefit-in-kind tax regime may present providers, such as Axa PPP Healthcare, with opportunities to consider products that could assist employers to pre-fund and budget for their occupational health needs, yet still avail their employees with the benefit-in-kind tax exemption.
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