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Medical check-ups and eyesight tests

Is the provision of medical check-ups and eyesight tests a reportable benefit?

The provision of private medical treatment or private medical insurance is an employment-related benefit and must be reported on form P11D. However, such benefits are not taxable and not reportable on

• form P9D if they are provided to lower-paid employees, i.e. employees with an earnings rate that is less than £8,500, or
  
  
• form P11D if a statutory exemption applies and the conditions for the exemption are met.

There are statutory exemptions for both medical check-ups and eyesight tests.

Health screening and medical check-ups

Under the provisions of Regulation 7 of the Income Tax (Exemption of Minor Benefits) Regulations 2002, no liability for tax arises under Chapter 10 of the Benefits Code on the provision of health screenings and medical check-ups if

• the provision is limited to one health screening and to 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.

A "health screening" is defined as an assessment to identify employees who might be at a particular risk of ill health.

A "medical check-up" is defined as a physical examination of an employee by a health professional which is limited to determining that employee’s state of health.

Chapter 10 of the Benefits Code covers benefits that are not specifically covered elsewhere in the Benefits Code. If the conditions for exemption are not met, e.g. more than one health-screening or medical check-up is provided in a year, or the benefit is limited to, say, senior staff, the benefit is reportable on form P11D (but not on form P9D). The reportable value is the cost incurred by the employer in providing the benefit.

Any benefits exempted under the Income Tax (Exemption of Minor Benefits) Regulations 2002 are also automatically exempt from any tax liability where the benefit is provided by means of a non-cash voucher and the conditions for exemption would otherwise have been met.

Also, as long as the exemption conditions are met, there is no liability for either Class 1 or Class 1A NICs on the benefit.

Eyesight tests

Under the provisions of section 320A of the Income Tax (Earnings and Pensions) Act 2003, no liability for tax arises under any chapter of the Benefits Code on the provision of eye tests, eyesight tests or "special corrective appliances" that such tests show are necessary if

• the provision of the test or corrective appliances is required by Health and Safety regulations, and
  
  
• such tests and appliances are made generally available to the employees for whom the Regulations require them to be provided.

The term "special corrective appliances" includes both prescription glasses and contact lenses.

The first of the two conditions specifically requires the rules set by Regulation 5 of the Health and Safety (Display Screen Equipment) Regulations 1992 to be met. Therefore, for the exemption to apply,

• the tests and glasses must be provided only for employees who habitually use display screen equipment as a significant part of their normal work,
  
  
• their work cannot be performed using normal glasses, and
  
  
• the need for special glasses has been identified by the eye or eyesight test.

Some useful guidance documents on these health and safety requirements are available at

www.hse.gov.uk/contact/faqs/eyesight.htm

and

www.hse.gov.uk/LAU/LACS/16-3.htm.

The exemption only applies to the cost of prescription glasses or contact lenses that are required solely for VDU use. If the glasses are used generally but include a special prescription for VDU work, a proportion of the cost will be exempt.

Employers should note that the new clause does not set any financial limits on the value of the glasses provided. The use of financial limits may cause employers to breach the rules for exemption by,

• where insufficient funds are provided, requiring an employee to fund part of the cost of the special glasses personally, or
  
  
• where more funds are provided than is necessary, providing the employee with a benefit that must be reported.

The exemption applies irrespective of the means by which the tests and glasses are provided, e.g. by means of non-cash vouchers or the employer’s credit card.

Also, as long as the exemption conditions are met, there is no liability for either Class 1 or Class 1A NICs on the benefit.

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