Health Screening and Medical Check-ups - Review of exemption from tax liabilities

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27 March 2008

In July 2007, Regulations were laid to exempt employer-provided health screening and medical check-ups from tax if certain conditions are met. The regulations came into effect from 14 August 2007 and replaced the non-statutory treatment previously set out in HMRC guidance. For the exemption to apply, the health screening and/or medical check-ups had to be available to all of the employer's employees generally on similar terms and were limited to one such event in each tax year.

However, following a number of representations, HMRC became aware that some existing health screening schemes could be affected in a way that was not envisaged at the time the Regulations were made. As a result, HMRC announced that discussions would be held with employers and their representatives to resolve the issues. In the meantime, HMRC confirmed that it would not seek to collect tax and NICs for the whole of 2007/08 in respect of health screening and/or medical check-ups where they would not have been payable on the basis of the previous non-statutory treatment.

HMRC is still considering the many responses received and has now announced that the concession not to collect tax on the basis of the Regulations is being extended to cover the 2008/09 tax year.

The previous guidance, which continues to apply for 2008/09, is 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."

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Further information:
Income Tax (Exemption of Minor Benefits) (Amendment) Regulations 2007
The Social Security (Contributions) (Amendment No. 6) Regulations 2007
Employer provided medical check ups