Tax-free counselling for employees
There is a welfare counselling exemption that covers the tax treatment of employer-provided welfare counselling.
The exemption allows employers to provide certain counselling services to employees without creating a taxable benefit. Updated guidance has recently been published. The guidance does not change the legislation or extend the scope of the exemption but clarifies how the existing rules may apply to workplace wellbeing support.
New examples cover mental health and menopause support, reflecting the types of assistance employers may offer their workforce.
The updated guidance also includes links to other tax exemptions that may apply to employer-provided health and wellbeing services, including:
- recommended medical treatment to help an employee return to work;
- health screening and medical check-ups; and
- employee assistance programmes.
Employers offering counselling or other wellbeing services should review their arrangements to ensure they are applying the correct tax treatment. The availability of an exemption will depend on the relevant conditions being met, so not all health-related benefits will necessarily qualify.
