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HMRC Backs Down From Health Screening Tax Proposals

by Robert Lee, Tax-News.com, London

24 October 2007


Following representations made by KPMG and others, the UK's HM Revenue and Customs has announced that it will not seek to collect income tax/NIC on medical check-ups or health screenings in the 2007/2008 tax year, even if check-ups or health screenings have not been made “available to all employees".

The “all employee” requirement had been introduced from 6 April 2007 by regulations which sought to clarify existing practice but included this additional requirement, though the effective date was later put back to 14 August 2007. This means that the position will revert to what it had been under HMRC’s non-statutory treatment of medical check-ups and health screening prior to 14 August 2007.

HMRC have announced that they will be consulting with employers and their representatives to find a way forward which meets the needs of both HMRC and employers.

Commenting on the tax authority's U-turn, Colin Ben-Nathan, partner in KPMG’s People Services practice stated: “This is a very welcome move by HMRC. They have clearly listened to the comments received after they made the August changes and realised that employer provided medical check-ups and health screening arrangements may be impacted in ways they had not envisaged. HMRC want to understand these impacts and consider how they might be addressed."

"We would very much encourage employers to feed in their views so that they can be taken fully into account," Ben-Nathan added.


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