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Employers can support employee wellbeing in tax-efficient ways by offering certain health and welfare benefits that do not trigger a taxable benefit-in-kind charge. Understanding which benefits qualify can help businesses enhance employee engagement and productivity while maintaining payroll compliance.
Health Screenings and Medical Check-Ups
Each employee is eligible for one health screening and one medical check-up per tax year without incurring a tax liability for these benefits. A health screening identifies potential health risks, while a medical check-up is a comprehensive examination to assess current health. These assessments are only available once a year and are meant for work-related health monitoring.
Eye Tests and Work-Only Corrective Lenses
Employees using display screen equipment are entitled to employer-provided eye tests under health and safety legislation. These are tax-free if required for their job. If corrective lenses are prescribed specifically for display screen use, they can also be provided free of tax, provided the benefit is available to all employees who require them for similar duties. If provided outside this framework, the cost becomes a taxable benefit.
Recommended Medical Treatment (Up to £500)
Where an employee has been absent from work for at least 28 consecutive days due to illness or injury, an employer may fund or reimburse recommended medical treatment up to £500 per employee per tax year. A healthcare professional must prescribe the treatment to support the individual’s return to work. This exemption can significantly aid long-term sickness recovery and facilitate smoother workforce reintegration.
Overseas Medical Treatment and Insurance
For employees working abroad, employers can cover the costs of medical treatment and health insurance without triggering tax. This relief ensures international assignments are supported from a healthcare perspective, safeguarding both the employee and employer from unexpected overseas health-related expenses. The exemption applies only during the overseas working period and not to private UK-based medical treatments.
Welfare Counselling Services
Employers can offer counselling for a variety of personal and work-related challenges, such as stress, anxiety, bereavement, workplace bullying, or substance abuse, without a tax charge. However, this exemption is tightly defined. It excludes financial advice (except debt counselling), legal matters, recreational guidance, and tax advice. To remain tax-free, counselling must be aimed at directly supporting employee wellbeing.
Providing tax-free benefits is a smart way to promote a healthier workforce while controlling employer costs. It’s essential to structure these benefits in accordance with exemption rules and apply them consistently. By aligning your benefits strategy with current legislation, you support employee health and ensure compliance with HMRC’s framework for benefits-in-kind.