Income Tax (Earnings and Pensions) Act 2003 section 320C

Recommended medical treatment

Section 320C provides a tax exemption for employer-funded medical treatment that is recommended through occupational health services to help an employee return to work after illness or injury, subject to a £500 annual limit and certain conditions.

• Employers can provide, pay for, or reimburse recommended medical treatment for employees without triggering an income tax liability, up to a maximum of £500 per tax year
• The treatment must be recommended through occupational health services — either under the Employment and Training Act 1973 or arranged by the employer — for the purpose of helping the employee return to work after absence due to injury or ill health
• The exemption does not apply where the treatment is provided through salary sacrifice or flexible remuneration arrangements
• The Treasury may make regulations imposing additional conditions, such as requiring the employee to have been assessed as unfit for work for a minimum number of consecutive days before the recommendation qualifies