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Fit for Work tax exemption guidance launched

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12th Jan 2015
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The Department for Work and Pensions (DWP) has launched guidance detailing the new tax exemption available for the cost of medical care for employees off work due to sickness. 

Fit for Work replaced the Health and Work service from December 2014. 

Under the new scheme, there is a limit of £500 per employee per tax year.

This is where employers fund the costs of medical treatments for an employee, recommended by a healthcare professional as part of Fit for Work or another employer arranged occupational health service.

The £500 limit will be exempt from tax and NICs. However if employers run over this limit they will be taxed on the excess. 

To qualify for the exemption the medical treatment has to be recommended to help the employee return to work after a period of absence due to ill health and injury and either: 

  • A healthcare professional has assessed them as not fit for work or may be fit for work for at least 28 consecutive days, due to ill health or injury
  • Or they have been absent from work for at least 28 consecutive days due to ill health or injury

The purpose of Fit for Work is to provide an occupational health assessment and health and work advice to employees, employers and GPs to help people return to or stay in work after an illness.

It provides impartial advice for employers and employees suffering from long term absence due to illness.

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