More than eight out 10 employers want the government to offer new tax incentives to support workforce wellbeing, helping to reduce absenteeism and boost economic growth.
The survey found widespread support among HR leaders for tax breaks that would encourage firms to offer employee benefits that support physical and mental health as well as financial wellbeing.
Employers said they would like to see such measures included in the Autumn Budget to support wider NHS reforms. The research, by Occupational Health Assessment, found that in total 84 per cent of HR leaders at these firms want the government to consider new tax incentives around worker wellbeing, with almost three in four (74 per cent) favoured a universal wellbeing tax incentive.
The next most popular option was a specific tax break for financial wellbeing (12 per cent), followed by mental health (9 per cent), then specific tax incentives for physical wellbeing support (4 per cent).
Occupational Health Assessment says there currently remains confusion about the tax treatment of many employee benefits, particularly in relation to the employee’s benefit-in-kind liability. As a result, many benefits are either unavailable or remain poorly promoted in many employer-sponsored wellbeing offerings.
Examples include the confusing difference in tax treatment between employee and family members in employee assistance plans (EAPs), employer-arranged financial advice, pension decumulation guidance, the tax treatment of low-cost health cash-plans, and even possible confusions about the taxation of any reasonable adjustments recommended by occupational health professionals or the government’s newly launched WorkWell scheme.
Occupational Health Assessment brand ambassador Steve Herbert says: “Much of the commentary in advance of the Chancellor’s Budget is centred on tax increases given the challenges of the nation’s finances.
“Whilst employers recognise these concerns, many believe it is in the interest of all parties – government, employers and employees – if wellbeing tax breaks were simplified to ensure that more workers can be prevented from becoming ill and therefore stay fit, healthy and productive.
“Company-funded employee benefits, wellbeing provision and occupational health support already do much of the heavy lifting in preventing minor wellbeing issues becoming major health problems for both the NHS, and by extension the entire nation. It surely makes sense to clarify and reinforce support in this area to continue and extend this good work to many more employees.”
Magnus Kauders, managing director of Occupational Health Assessment adds: “Our survey suggests that HR experts favour a universal wellbeing tax break rather than siloed tax incentives for specific components of workforce wellbeing.
“There is a case for the government to review the tax treatment and tax incentives that currently exist for many low-cost wellbeing and employee benefits, and perhaps replace this confusing landscape with one overreaching offering that is more easily understood, avoids any additional employee tax liabilities on these inexpensive benefits, and is easy to report under the new payrolling of benefits in kind system from 2027.
“In this way many more employers would be encouraged to offer and promote these valuable support options to their workers.”
Herbert added: “The government’s focus in NHS reform is moving the service from one of treating sickness to actively preventing illness. Encouraging employers to do more to support the wellbeing of their workforce will bring that ambition closer to reality.”
