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Tax free medical treatment

The Government is introducing tax and NIC relief for costs where an employer funds treatment to help an employee return to work after a period of sickness.

The Government now wishes to consult on draft regulations for the relief.  The key issues are that:

  • the recommendation for medical treatment (given by a health care professional) must be given after an employee has been assessed as unfit for work, or as expected to be unfit for work, for at least 28 consecutive days.
  • the assessment that an employee is unfit for work will also include an assessment that they ‘may be fit’ for work subject to appropriate arrangements.
  • the recommendation for medical treatment must be provided in writing and must, as a minimum, confirm the medical treatment that is recommended.

The proposal on record-keeping requirements is that employers should keep the relevant records for at least 3 years.  Such records could be: attendance records; Fit Notes; Return to Work Plans or equivalent documents to provide evidence that all relevant criteria have been met and the tax exemption applies.



Date: 2nd October, 2014
Author: Cathy Corns


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