As part of the Autumn statement, the Chancellor announced that from April 2017, only a narrow set of items can be provided under salary sacrifice arrangements without being taxed. In particular, the provision of health checks via Salary Sacrifice will attract income tax and national insurance for the employee. This has been widely reported. For instance
“The Government is to axe ‘salary sacrifice’ tax perks on a range of employee benefits such as health screening checks, company cars and mobile contracts from 5 April.” Money Saving Expert website
What has been less widely mentioned is that the annual health assessment is still a tax free benefit in kind – i.e. when declared on a P11D there is no tax implication.
So while other benefits provided by salary sacrifice will have to be declared on the P11d and attract an employer’s national insurance contribution at 13.8%, health assessments will not – unlike private medical insurance.
ToHealth are strong believers that there is an ROI in investing in workplace health and therefore believe that these changes should encourage companies to consider offering health assessments as a company wide benefit in kind. Since companies can reclaim the VAT charged on health assessments, the effective cost of the company paying for a health assessment is more than halved vs. a salary sacrifice payment for a 40% tax payer