HMRC Tax Guidelines in relation to Employee Assistance Programmes (EAP)
Prior to the budget statement in March of this year the Office for Tax Simplification published a series of recommendations including the removal of tax relief on Employee Assistance Programmes (EAP) and Welfare Counselling services.
To date the government has decided not to act on all the OTS recommendations and Health Matters is pleased to note that the latest consultation document published by HMRC on its website does not include EAP and counselling services on the list of 36 tax reliefs being considered for abolition in 2012. Whilst this is no guarantee that the government will not revisit this recommendation in future, it is a welcome sign that the immediate threat appears to have abated. The Employee Assistance Professionals Association (EAPA) will continue to lobby the government on behalf of the industry to stimulate further debate and discussion of this issue.
In the meantime, current HMRC guidelines continue to apply to the provision of EAP services. We are committed to ensuring not only that the services it provides are compliant with the guidelines but that the positioning of the EAP in its promotional materials, contracts and other literature is also appropriate.
Health Matters has been minded to revise its customer contract(s), bringing them into line with all legal requirements and protocols. As part of this exercise Health Matters in conjunction with the core-service (EAP) underwriter(s) has ensured that the wording used in the contract to define the core EAP services is appropriate within the context of the HMRC guidelines. A specific change that has been introduced into the new agreement is a section requiring the customer to authorise the provision of services to dependents. Access to EAP services by dependents is limited by HMRC, and confined to personal issues that are impacting on the employee's work performance or family relationships. Therefore couple or family counselling is acceptable, but the guidelines state that dependents are not permitted to access face-to-face counselling on their own and should not have access to legal advice. Health Matters strongly recommends that its customers seek independent tax advice before advising Workforce Wellness-EAP on what if any services it would like to make available to dependents. In the meantime, however, we will not withdraw service to dependents unless instructed to do so by its customers.
Health Matters in conjunction with the core-service (EAP) underwriter(s) has also reviewed its promotional materials to ensure that the positioning of its services is also in line with the guidelines.
Whilst we are unable to offer specific tax advice on this issue, we are happy to provide as much assistance as we can to help our customers stay compliant with the guidelines. If you have any questions arising from this update then please contact your EAP-Account Manager or call 024 7651 6080 in the first instance.