HM Revenue and Customs (HMRC) has clarified its guidelines concerning the tax status of employee assistance programmes (EAPs).
You can read the guidance on their website or read the industry’s view on the EAPA website.
There had been some discussion about the status of legal and financial information services. Crucially, the new guidance clarifies that both can be included within a tax exempt EAP as long as they are provided within a mental health model and are restricted to a signposting service (i.e. putting a framework around the issue such that the individual feels able to cope and to take the required next steps in resolving their issue).
Worklife Support is satisfied that our legal and financial services conform to this tax-exempt definition.
Some of the rules governing what is allowed have been tightened. For example, there will be a limit on the number of repeat calls to the financial and legal services about the same issue and some restriction on access to EAP services by family members.
We have undertaken a full review to identify any changes that we need to make to help our customers ensure compliance and have amended our service specification, contract and promotional material as a consequence. We anticipate that the impact of the guidance on our overall service will be minimal.
Anyone considering buying an EAP should check the configuration of the offering to check that the service could be deemd to be a taxable benefit.
Contact us if you have any questions or comments.
