Five Tax-Free Health & Welfare Benefits Employers Can Offer

:: 00:00

Welcome to another episode of I Hate Numbers. This is your host, Mahmood, accountant, tax advisor to creatives, small businesses and social enterprises. Now in today's episode, this is one for all employers out there whether you run a small business or a not-for-profit social enterprise, it makes no odds.

:: 00:18

But I'm going to be talking about five tax-free health and welfare benefits you can give your team. And when I say tax-free, I mean just that - no nasty surprises from our friends at HMRC. There aren't any benefit-in-kind charges, just practical, supportive perks that boost your staff's wellbeing and helps you keep your payroll costs under control.

:: 00:39

What's not to love about that? Let's dive in. Number one, annual health check-ups. Now, this is the first one on the list. These are health screenings and medical check-ups. Now you can offer your employees one medical check-up per year, completely free of tax. Now, that covers things like basic health screenings and general assessments,

:: 00:59

things like blood pressure checks, cholesterol levels, or just a good old MOT for the body. But here's the rule, and there's always a rule, and it's a firm one. It must be health focused only. Don't try leveraging and squeezing in other perks like spa days or gym memberships. That'll lose the exemption and land you in benefit-in-kind territory - not where you want to go.

:: 01:21

Let's say you run a charity and you want to offer an annual wellbeing check for your team. Just do it. Make sure it's a straightforward medical check, not a wellness package, with all the bells and whistles. Stick to the rules and everybody's a winner. Secondly, eye tests and glasses for screen users - what we might call the humble eye test.

:: 01:40

Now, if your staff use display screens, which is very likely, then under the Health and Safety at Work Act of 1974, if you want to be officious, you must offer an eye test. Now, the good news is that test is tax-free, no cost to the employee, no tax implications for you, and you can deduct that cost if you're in a situation where you do a corporation tax return.

:: 02:02

Now, if that test says your employee needs glasses for screen use only, you can also provide these tax-free. Ideally, get the optician to make a note on the prescription, and that's a nice bit of evidence for you to keep as well. But, and there's always a but… these must only be for screen work. If you go out giving designer specs for everyday use, you'll look very fashionable.

:: 02:24

But HMRC might have something to say about it. So let's assume you're running a small social enterprise and all your staff use laptops. You cover their eye tests and where needed you pay for screen used glasses only. That's absolutely wonderful. No tax issues. Job done. Number three on our list is 500 pounds for recommended medical treatment.

:: 02:44

Now this is support post illness. Now, if one of your team is off sick or injured for at least 28 days, and a health professional recommends treatment to help them return to work, you can cover up to 500 pounds of that treatment tax-free. Now it's got to be medically recommended and it has to relate to that period of absence. So make a note - keeping a diary entry, some form of evidence,

:: 03:07

it's always going to be good for you to do. Not only does this, by the way, help your staff get back on their feet faster, it's going to boost morale and keep your operation running smoothly. Now, let's assume one of your team members in your CIC breaks a leg. The physio recommends a course of rehab therapy to get them back to work quicker.

:: 03:25

It sounds perfectly sensible. You pay for it, and as long as it's under 500 pounds, and recommended, it's tax-free. Now, remember, general private healthcare doesn't count. This is about return to work support, not a private health perk. Scared of figures? Think accountings are dark art? I Hate Numbers is your straight-talking guide to business numbers and mindset.

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:: 04:06

Number four on our list is medical treatment while working overseas. Now, let's cross some borders here. Now, if your employees work overseas even for a short period of time, you can offer tax-free medical treatment and cover. Now that includes direct medical treatment and insurance policies to cover any treatment while overseas.

:: 04:26

Now this exemption encourages safe working abroad and it avoids the tax mess of covering UK treatment under the same plan. Now you could be a charity that sends a project worker to Kenya, for example, for three months. You buy them travel health insurance and offer access to local medical support.

:: 04:44

That's all fine and dandy and it's all tax-free. Now don't try and leverage an entire lever in UK based private healthcare under this umbrella. That's not covered. Number five on our list is about mental health and well-being, welfare counselling. Now you can offer tax-free counselling to staff as long as it falls within HMRC’s accepted categories, and by tax-free counselling

:: 05:07

by the way, we're talking about tax-free welfare counselling. Now, this includes stress and mental health, bereavement, addiction, work-related problems, bullying or harassment, illness, relationship breakdown, or conduct issues. Now, this is all going to form part of what we see, which is really to be encouraged of creating a healthy, supportive workplace.

:: 05:30

Now, please be careful, there are exclusions. You can't offer general financial advice, legal support, tax guidance, or leisure counselling under this exemption. If you do find you need to actually offer that type of support, talk to your existing accountants or cough, cough, drop us a line. Now, you could be a small creative agency.

:: 05:49

One of your staff is struggling with stress. You bring in a qualified counsellor to offer sessions. That's allowed and is perfectly tax-free. But just don't use that as a backdoor route or a sneaky way to offer tax advice or legal support. Now, why does this matter and what we do next? Well, let's wrap it up and let's put it all together.

:: 06:09

Now these five health and welfare benefits I've outlined are more than just nice extras. They show your team you care. They impact morale on a positive note. They reduce stress and sick days, and they help you stay efficient and compliant. Now here's your simple to-do list. Review your current health benefit offerings.

:: 06:30

Secondly, check if you are already providing any of these options. Thirdly, make sure you follow the conditions, no mixing or bundling. Number four, avoid those benef-in-kind traps. And lastly, number five, make sure access is fair for all staff. No favouritism. You can't just say these members of staff can have it, but you can't. Use these tax breaks wisely.

:: 06:54

And your team and your accountant smiling. So what have we learned? Well, you don't actually need a massive HR budget to offer great health and welfare benefits, and that could be a great addition for when it comes to your recruitment strategy. Use what's already tax-free. Stick to the rules, support your team and you know, keep our friends at HMRC off your back.

:: 07:15

Now, if you're unsure where to start, or if your current benefits package is taxed high or tax-troubled, we can fix that. Book a diagnostic review session with us at I Hate Numbers. You get clear answers (no waffle) and practical steps to improve your payroll planning. Visit ihatenumbers.co.uk and get started today.

:: 07:34

Support your team. Save tax, plan it, do it and profit.