Products that assist employers to pre-fund and budget for their occupational health could be developed following the extension of the £500 return-to-work tax break to non-Health and Work Service recommendations says Axa PPP Healthcare.
The provider says the extension, for which it and the ABI lobbied, could drive product development towards structures that would allow employees to still enjoy the benefit-in-kind tax exemption.
The Autumn Statement extension of the scope of the £500 per employee tax break, that had previously only applied to recommendations made by the Health and Work Service, will benefit employers with existing occupational health capabilities says Axa PPP Healthcare director of consulting Elliott Hurst.
Hurst says: “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 who 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.”
Unum head of public affairs and CSR John Letizia says: “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 who invest up-front in services like 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 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 Autumn Statement on the HWS tax exemption:-
2.49 Tax exemption for employer-funded occupational health treatments – As announced at Budget 2013 the government will introduce a tax exemption for amounts up to £500 paid by employers for medical treatment for employees. In response to consultation the government will extend the exemption to medical treatments recommended by employer‑arranged occupational health services in addition to those recommended by the new Health and Work Service (Finance Bill 2014).