Check-ups exemptions 'could be lost'
- Published: 16/08/2007
Newly-introduced legislation could result in thousands of employees losing their personal income tax exemption from health screening and medical check-ups, a tax expert has claimed.
Matthew Lawrence, practice head of Risk & Healthcare at Aon Consulting, says that new legislation, intended at ensuring fairness across the workforce and formalising health screening and check-up tax exemptions, is so confusing that it might actually result in the removal of this benefit for many in the UK's workforce.
"The legislation, an 'Amendment of the Income Tax (Exemption of Minor Benefits) Regulations 2002', means that employees will not have to pay tax on health screening and medical check up health benefits, but only if health screens are available to all employees, and medical check-ups are available to either all employees, or to all employees that have been identified by a screen, as needing a check-up. If these criteria are not satisfied then the health screenings and medical check ups will be taxable," Mr Lawrence explained in an interview with recruitment website onerec.com.
"But the terminology used in the legislation is confusing. For example, what the legislation defines as a 'health screen' is really an assessment to identify employees that may be at a particular risk of ill health.
"What Aon, and many employers, would normally consider to be a 'health screen' is a combination of the legislation's definition of a 'medical check-up' and a lifestyle assessment," he added.
Mr Lawrence added that, before the introduction of this latest legislation, tax exemptions on health screens were "acknowledged" by the Revenue, even though they had no formal legal basis.
Matthew Lawrence, practice head of Risk & Healthcare at Aon Consulting, says that new legislation, intended at ensuring fairness across the workforce and formalising health screening and check-up tax exemptions, is so confusing that it might actually result in the removal of this benefit for many in the UK's workforce.
"The legislation, an 'Amendment of the Income Tax (Exemption of Minor Benefits) Regulations 2002', means that employees will not have to pay tax on health screening and medical check up health benefits, but only if health screens are available to all employees, and medical check-ups are available to either all employees, or to all employees that have been identified by a screen, as needing a check-up. If these criteria are not satisfied then the health screenings and medical check ups will be taxable," Mr Lawrence explained in an interview with recruitment website onerec.com.
"But the terminology used in the legislation is confusing. For example, what the legislation defines as a 'health screen' is really an assessment to identify employees that may be at a particular risk of ill health.
"What Aon, and many employers, would normally consider to be a 'health screen' is a combination of the legislation's definition of a 'medical check-up' and a lifestyle assessment," he added.
Mr Lawrence added that, before the introduction of this latest legislation, tax exemptions on health screens were "acknowledged" by the Revenue, even though they had no formal legal basis.