Want to provide Tax-Free Health and Welfare Benefits and reduce tax liabilities?
Good news. You can do both.
In this blog, we explore five tax-free health and welfare benefits.
These benefits help your team and keep your payroll costs efficient.
Even better, they avoid the sting of benefit-in-kind tax.
Let’s dive in.
Health Screening and Medical Check-Ups
Annual Check-Ups Are Tax-Free
Employers can offer one medical check-up per tax year.
This includes health screening and general assessments.
Health screening spots potential risks to an employee’s health.
Medical check-ups assess a person’s health through physical examination.
As long as it’s once a year, it’s tax-free.
Make It Clear: Health Only
These check-ups must focus solely on health.
If they’re bundled with extras, the tax exemption may vanish.
Stick to screenings and assessments only.
Avoid combining them with unrelated perks.
Eye Tests and Glasses for Screen Users
Legal Duty Meets Tax Efficiency
Use display screens at work?
Then you must offer eye tests by law under the Health and Safety at Work Act 1974.
Provide these tests to all affected employees.
This avoids a taxable benefit being triggered.
What About Glasses?
If the test shows a need for glasses, those can be provided too.
But here’s the catch.
They must be for screen use only.
And again, they must be available to all who need them.
Watch Out for Tax Traps
Provide glasses outside these rules?
Then you’re back in benefit-in-kind territory.
Only tests and glasses linked directly to screen work are exempt.
£500 for Recommended Medical Treatment
Help Employees Return to Work
Support staff returning from sickness or injury?
You can offer up to £500 in medical treatment tax-free.
Must Be Recommended by a Health Professional
The treatment must be medically recommended.
It must also relate to an absence of at least 28 days.
Support like this speeds up recovery.
It boosts morale.
It cuts absence time.
And it’s tax-smart.
No Exemption Without a Recommendation
General private healthcare doesn’t count.
Stick to what’s recommended for return-to-work plans.
Medical Treatment While Working Overseas
Overseas Cover is Tax-Free
Working abroad brings its own risks.
Luckily, you can provide medical cover for your team overseas.
This includes:
- Direct treatment costs
- Insurance cover for treatment abroad
Why This Matters
This exemption encourages safe, supported international working.
It avoids tax complications when employees travel.
But remember — UK-based private healthcare is not tax-free.
Know What’s In and Out
Abroad? Treatment is fine.
UK? Treatment is taxable.
Don’t mix them up.
Welfare Counselling
Certain Counselling Is Exempt
You can offer tax-free counselling services to your staff.
But the rules are tight.
The support must relate to:
- Stress and mental health
- Addiction (alcohol or drugs)
- Bereavement
- Work-related problems
- Bullying, harassment or abuse
- Illness
- Conduct issues
- Relationship breakdowns
What Doesn’t Qualify?
The following are excluded:
- General financial advice
- Legal advice
- Leisure or recreational counselling
- Tax guidance
Stick to the List
Stay within the HMRC-approved categories.
Otherwise, the taxman will come knocking.
Why Use Tax-Free Benefits?
Tax-free benefits help retain staff.
They improve morale and reduce stress.
They show you care about employee wellbeing.
And they save tax — for both the employer and the employee.
Furthermore, they also form part of a smart employee rewards strategy.
You can combine them with salary sacrifice and other planning options.
Read more on employee benefits and payroll strategies here.
Keep It Compliant: Your To-Do List
- Review your current health benefits offering
- Check if you provide any of the above tax-free options
- Make sure conditions are fully met
- Avoid benefit-in-kind traps
- Offer fair and equal access to staff
Final Thoughts: Use Tax Breaks to Support Staff
Offering tax-free health and welfare benefits isn’t just nice.
It’s financially smart.
You show staff they matter.
You save money.
And you reduce the risk of HMRC issues.
Need help reviewing your current staff benefits package?
Want to save tax and keep your team motivated?
Book a Chat with I Hate Numbers Today
We’ll help you stay compliant and tax-efficient.
Book a tax diagnostic review session
You’ll get clear answers with no waffle.
Plan It, Do It & PROFIT!