5 Tax-Free Health Benefits Employers Can Offer in the UK

Providing meaningful health and welfare benefits to employees not only supports their well-being but can also be done without incurring additional tax liabilities. HMRC allows a range of health-related benefits that can be offered tax-free, provided certain conditions are met. Here are five valuable options that employers can consider.

1. Health Screenings and Annual Medical Check-Ups

Employees are entitled to one health screening or medical check-up per tax year without triggering a tax charge.

• A health screening helps identify employees who may be at risk of illness.
• A medical check-up is a general health examination by a medical professional.

These benefits are tax-free as long as they are limited to one instance per year and solely for assessing the employee’s state of health.

2. Eye Tests and Display Screen Equipment (DSE) Glasses

If an employee uses display screen equipment, such as a computer, employers must offer eye tests in compliance with the Health and Safety at Work Act 1974.

• The eye test is not a taxable benefit.
• If the test shows the employee needs corrective appliances specifically for screen use, those can also be provided tax-free.

However, if glasses or tests are provided outside this scope (e.g., for general use), then a tax charge may apply.

3. Medical Treatment to Support Return to Work

To assist employees returning to work after injury or illness, employers can fund or reimburse up to £500 of recommended medical treatment without it being taxed.

• The treatment must be recommended by a medical professional.
• The employee must have been absent from work for at least 28 consecutive days.

This exemption helps facilitate recovery while keeping both the employee and employer financially protected.

4. Overseas Medical Support

For employees working outside the UK, employers can cover the cost of medical treatment and medical insurance for treatment abroad without creating a taxable benefit.

However, it is worth noting:

• Medical treatment in the UK is taxable.
• Private medical insurance for UK-based treatment also remains a taxable benefit.

5. Welfare Counselling Services

HMRC allows tax-free welfare counselling that helps employees cope with a range of personal and professional challenges, including:

• Stress and mental health issues
• Workplace conflict or bullying
• Bereavement and family problems
• Substance dependency

This exemption does not cover financial (except debt), legal, tax, or recreational advice.

Final Thoughts

Employers looking to promote a healthy and supportive workplace environment can do so while staying compliant with tax regulations. Offering these five health and welfare benefits not only fosters employee wellbeing but also adds value to your company’s employee benefits package, without extra tax costs.

Partner Note: ITEPA 2003, ss. 210, 320A, 320B, 320C, 325; SI 2000/2080.

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