Work related ill health is a serious issue and with recent government figures suggest that 1.3 million workers suffered from work-related ill-health. This equates to potentially over 25 million working days lost, hence promoting employee health and wellbeing has never been so important and is considered a vital part of a successful business. This, however, does not necessarily come cheap. It is estimated to cost £522 per employee which equates to up to £32 billion per year for UK business alone.
Here are some areas where you as an employer can use tax breaks and exemptions to help encourage a healthy mind and a healthy body at work.
Sports facilities
Larger organisations are often able to offer gym or leisure facilities for staff in the workplace (or at a location convenient to work). Run either by the organisation directly, or by a third-party provider. The facilities can be offered to employees to access for free or on a paid-for basis.
In-house gym facilities may be provided tax and NIC free if the following conditions are satisfied:
- the facilities must not be available to the general public and must be available for use by all employees;
- they must be used mainly by employees, former employees or members of employees’ families and households (employees of any companies grouped together with to provide the facilities also count);
- private dwellings, holiday or other overnight accommodation (including any associated sporting facilities) cannot house the facilities;
- road vehicles, planes and boats do not qualify, nor must the use of mechanically propelled vehicles.
If providing in-house gym facilities for your workforce is not an option, it may be possible to negotiate membership rates with a local gym or leisure centre. However, this may lead to a tax liability for employees, with corporate negotiated rates often up to 30% more economical than regular prices, this is still an attractive offer for employees. Look at how the cost of the gym membership is funded. If an employer pays the employee more salary to pay for their membership the fees will either be taxed as earnings or as a taxable (BIK) benefit-in-kind. So, for example, if an employer pays the employee additional salary to cover their gym membership, the money is taxed as earnings through PAYE. If the employer pays the gym membership direct, a taxable benefit-in-kind (BIK) arises on the employee and should be reported to HMRC on form P11D.
Promoting good health with tax breaks
A healthy team is a productive team, that is an established truth. The government recognises these benefits too and has introduced a number of tax incentive to encourage good health.
A tax and NIC-free exemption allow employers to fund one health-screening assessment and/or one medical check-up per year per employee. The annual cap is £500 per employee, employer expenditure on medical treatments recommended by employer-arranged occupational health services may be exempt for tax and employee NICs. ‘Medical treatment’ means all procedures for diagnosing or treating any physical or mental illness, infirmity or defect. For the exemption to apply, the employee must have either broadly speaking:
- been assessed by a health care professional as unfit for work (or will be unfit for work) because of injury or ill health for at least 28 consecutive days;
- been absent from work because of injury or ill health for at least 28 consecutive days.
Visit HMRC for more information about Fitness at Work by clicking here
Providing certain criteria is met, employer-funded eye, eyesight and ‘special corrective appliances’ (ie glasses or contact lenses) may also be exempt for tax and NICs.
With the dread over-indulgences of the festive season, which now seems to span the whole of December and half of November, fitness and health issues inevitably become more popular. Anything you can do as an employer to help employees beat the post-Christmas bulge is likely to be welcomed.
For 2020 HB Accountants in Hoddesdon, Hertfordshire are pledging to encourage healthier body, healthier mind and healthier environment. Follow us on Facebook, Twitter, LinkedIn and Instagram to discover more and see how you can get involved too.
Click here to see what #healthybodyinitiatives we were involved with last year.
#TeamHB’s Tax Manager, Amy Armitage, is always available if you would like more tax planning or tax saving information – feel free to email amy@hbaccountants.co.uk or call 01992 444466.
