Health Screening and Medical Check-ups – Original rules to be restored from April 2009Monday, December 29th, 2008
In July 2007, Regulations were introduced to exempt the provision of health screening and medical check-ups from income tax. The regulations came into effect from 14 August 2007. Prior to that date , the concessionary treatment of these benefits was as follows:
“Do not treat expenses incurred by the employer in providing periodic medical check-ups for employees, as conferring a chargeable benefit on those employees. If an employer incurs expenses in providing check-ups for members of an employee’s family or household this represents a benefit chargeable on the employee unless the family or household member is also an employee of the employer who provides the check-up.”
The replacement formal exemption was more restrictive. Regulation 7 of the Income Tax (Exemption of Minor Benefits) Regulations 2002 states that the benefit is exempt from tax if:
- the provision is limited to one health screening and one medical check-up each year
- health screenings are available to all employees, and
- medical check-ups are available to either
- all employees, or
- those employees who have been identified in a health screening as requiring a medical check-up.
Strictly speaking, that Regulation is still in force. However, in October 2007, following a number of representations, HMRC announced that, as the exemption requires health screenings to be made available to all employees, some existing health screening schemes could be affected in ways that were not envisaged at the time the Regulations were made. Consequently, HMRC opened discussions with employers and their representatives and, in the meantime, for the rest of 2007/08 and the whole of 2008/09, allowed the previous non-statutory treatment, as reproduced above, to remain in place.
On 10 December 2008, HMRC announced that, in response to the comments and representations received, the Government has decided to include legislation in the 2009 Finance Bill that will exempt from tax the provision of annual health screening and medical check ups by employers from 6 April 2009, but without a requirement for the benefits to be made available generally on similar terms to all employees.
The effect will be that the tax and NICs treatment of employer-provided medical checks will be broadly the same as it was before the Regulations were introduced in August 2007. The current concessionary practice not to collect tax and NICs under the existing Regulation will continue.
Employer-provided medical check-ups
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