HM Revenue and Customs (HMRC) is considering proposals to tax Employee Assistance Programmes (EAPs), where employers offer legal helplines as part of an overall employee benefits package. According to the EAP Association, there is even talk of backdating this tax for up to seven years. As one of the largest global providers of human resource services, Ceridian in the UK is calling on employers to join forces to put pressure on the UK Government to avoid taxing EAPs, both current and historical, as this could have a negative impact on employee health and wellbeing.
Paul Avis, corporate development manager, at the LifeWorks division at Ceridian UK commented: “CIPD research from 2006 shows that 28 per cent of employers had EAPs, while a further 12 per cent were planning to introduce them in the two years to spring 2008. According to the CBI, the cost of absence due to ill health is costing British business £13bn per year and EAPs can make a positive impact on absence costs by promoting better employee health and wellbeing. This is supported by this month’s Employee Benefits Healthcare Research, which showed that 57 per cent of employers believed that they helped to reduce sickness absence and 83 per cent used them to combat stress.
“EAPs represent a beneficial service and it is of major concern that by taxing EAP legal helplines Government will negatively impact employees’ health and wellbeing.
“EAPs are a small ticket item, costing tens of pounds rather than hundreds. It seems that anything that makes employees valued by employers is ignored by this Government with devastating losses, at both a personal and UK PLC cost level.”