22.03.2011 Review of Tax Relief for EAP services

In regards to the question of tax relief relating to EAP services within the UK, we are now aware of the 'Review of Tax Reliefs' report presented to the Chancellor by the Office for Tax Simplification in March 2011, and its recommendations that the tax relief benefits on EAP’s be abolished. However as a reasonable alternative, the report also suggests that consideration could be given to replacing it with a ‘de minimus’ level for benefits.

“An Employee Assistance Programme (EAP) is a strategic intervention and valuable organisational tool that addresses team and individual performance and supports wellbeing in the workplace," explains Mr David Smith, Chairman of the UK Employee Assistance Professionals Association (EAPA).

Mr Smith goes on to say "Given the unique role that EAPs have in the workplace they should not be regarded as employee benefits and therefore should not be classified as such when it comes to taxation or tax relief. In this regard, the UK Employee Assistance Professionals Association believe EAPs should continue to be tax exempt although their low cost means that they may fall under a newly clarified de minimus threshold”.
The wider EAP market now patiently awaits the 2011 Budget statement to confirm the Chancellor's decision on the future of tax relief when it comes to EAPs.  Further update(s) will be posted as we receive news of the changes.
Workforce Wellness EAP clients' will receive official confirmation and relevant advice following the Chancellor's speech in the 2011 Budget.  Please contact your WW-Account Manager if you have any questions in the interim.
Posted 22/03/11.
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