Flatcapdriver

****ing ridiculous. We've just had notification from HMRC that our annual medical assessments are now a taxable benefit at 40%, the net result being that employees are going to question whether its worth the expense and many will not bother.

So, on one hand you've got the government expecting companies to provide employee benefits to ensure healthy workers with the net benefits of increasing UK Plc's GDP and on the other hand saying - sod 'em we're taxing them anyway. The worst thing is that the tax is applied retrospectively, so its not as if anyone has the choice for this year's health assessment.

The retrospective element sets a dangerous precedent, as now they can quite simply apply it to any form of taxation if the coffers need filling. So tax smokers out of existence despite the healthy level of funding they brought to the NHS, realise the tax revenue is falling and then tax everyone for looking after themselves.

****ing madness.

Scooby Snacks 23

Lifted from an accountancy circular floating around my office:-

Two new Statutory Instruments provide a formal exemption for medical check ups or vouchers used to pay for them - but only where they are provided to all staff or focused on those who have been identified as at special risk for some reason. This is a significant change in practice.
New regulations provide for one health screening and one medical check up per employee per year to be exempt from income tax and NIC, where health screenings are made available to all employees and medical check ups are available to all employees, or those who have been identified as at particular risk. The regulations have effect for the tax year 2007/08 onwards.

The explanatory notes suggest that this is just codifying an existing practice and there is no regulatory impact assessment done, because no impact is anticipated. In fact this appears to be a significant change in HMRC practice.

It has long been the stated practice of HMRC that where an employer provides their employees with health screening or a medical check up it should not be considered a taxable benefit. A similar view had been taken with regard to the provision of eye tests and special corrective appliances for employees using VDUs. Until now the tax treatment has been based on an established practice rather than a statutory exemption and the practice as set out in guidance in EIM21765 makes no mention of the requirement for the check-up to be available generally to employees.

It was unclear whether, since the income tax regulation is made under s210 ITEPA 2003, it was considered it could only apply to benefits available to all staff, or whether some other form of concessionary practice is intended to continue.

HMRC has confirmed that legal advice confirmed that the position couldn’t be sustained in relation to eyetests and that strictly a benefits tax charge arose on their provision. In light of that advice HMRC's position on health screening and medical check ups was also reviewed as strictly according to law, a tax charge could arise on such provision. By introducing these regulations HMRC has at least provided employers with certainty by putting the tax position beyond doubt, without fully withdrawing the exemption. Various other statutory exemptions (e.g. welfare counselling) have the “generally available to all employees” test as required by s210.

There is apparently no intention to introduce further legislation to widen the current exemption.

Leslie

What else can you expect from a bunch of graspers led by the grasper in chief.

It won't be long before another bunch of taxes that you would not believe start to appear.

They have to pay their obscene salaries and untaxed allowances and enormous pensions somehow you know!

Les