Employee health benefits cost less than you think

Tax-efficient employee benefits support employee wellbeing, and the bests interests of your business.

As a caring and responsible employer, you want to support your team’s wellbeing but you also want to avoid unwanted tax or benefit-in-kind (BIK) surprises. The good news? There are several health-related benefits you can offer that are legitimately tax-free under UK rules. These options deliver real value for your employees, while keeping things compliant and cost-effective.

Workplace wellbeing for everyone

If you run your own business, don’t forget these same tax-efficient health benefits can - and should - benefit you as well as your team. As a business leader juggling significant responsibilities, busy schedules and long days, it’s vital you prioritise your own health and wellbeing as much as your staff’s.

What options do you have?

We’ve summarised below some of the most useful, often under-used, approaches you might want to consider. Key to these all these approaches in ensuring they’re made generally available to to the whole workforce.

Annual health checks and private medical assessments

Employers can fund a routine medical check or health screening for staff without triggering a BIK charge, provided the offer is broadly available to all staff, not just a select few. This kind of preventive care supports long-term health and early detection, helping employees to stay fit and well, in their both their personal and professional lives.

Workplace wellness and lifestyle schemes

Tax-efficient ‘all-employee’ benefits can also include wellness initiatives such as flu vaccinations, cycle-to-work schemes and, in some cases, onsite gym or wellbeing access.

Medical treatment for work-related issues

If an employee suffers a work-related illness or injury and a medical professional recommends treatment to help them return to work (eg physiotherapy, counselling or minor treatment) the employer can pay up to a capped amount (currently £500 per tax year per employee) tax-free when certain criteria are met. You can find further details about these criteria on the UK Gov website

Eye-tests for screen-based workers

If your staff use computers or other visual display units (VDUs) as part of their role, you’re obliged under health and safety rules to provide eye-tests on request. If you, as the employer arrange and pay directly for the test, this benefit is exempt from tax. Even corrective glasses for VDU use can be provided tax-free, as long as they are needed solely for screen work.

Health benefit = business benefit

Providing these kinds of health benefits isn’t just a perk, it’s a smart investment in staff wellbeing, morale, retention and productivity.

Improved health means fewer sick days. Regular check-ups, early screenings and preventive care can catch health issues before they become serious.

Mental and physical wellbeing supports performance and resilience. Access to counselling, eye-health for screen workers and wellness schemes demonstrates employer care and supports longevity at work.

Attractive benefits help talent attraction and retention. In a competitive labour market, offering thoughtful health-related benefits can set employers apart.

It’s financially efficient. When structured correctly, benefits are tax-free, which means staff get real value and employers avoid unnecessary tax or compliance complications.

Staying compliant

If you’re considering implementing or reviewing your employee benefits package, it’s worth seeking tailored advice from an accountant or tax advisor to ensure you stay within HMRC’s rules and optimise tax efficiency. Always pay attention to the ‘fine print’ to ensure employee health benefits remain tax-free. For example:

Offer them to all eligible staff not only directors or senior employees.

Pay or arrange directly don’t reimburse staff after the fact, unless explicitly allowed under HMRC guidance.

Keep clear records and documentation of what’s provided, to whom and why especially for eye tests or medical treatment connected to work.

Be cautious about “dual-purpose” items for example, glasses used for general vision outside work as well as screen use (only VDU-specific prescriptions are fully exempt).

How The Hove Practice can help

If you’re considering offering health benefits to your team, or reviewing your current package, we’d love to help. We offer tailored health checks and medical assessments that suit a workplace setting and support staff health holistically. We can also work with you to design employee health-benefit packages (eg flu jabs, wellness reviews, lifestyle support) that are tax-efficient and compliant.

Want to know more?

Whether you’re a small team or a larger workforce, we’d love to work with you to create a model which prioritises the wellbeing of your employees, while also running your business efficiently. Contact us, if you’d like to explore the options together.

Contact our Practice Manager via our main number 01273 733830
Email us at pm@thehovepractice.co.uk
Pop in and see us: 86 Church Road, Hove, BN3 2EB