Section 12 of Finance Act 2014 introduces a new tax exemption, capped at £500 per employee per year, for expenditure by employers on recommended medical treatment that is intended to help an employee return to work after a period of absence due to injury or ill-health.

Recent draft Regulations have now confirmed that the employee must be assessed by a health care professional, and the period of sickness must cover a consecutive period of at least 28 days, to qualify for this ‘generous’ exemption.

For those concerned that the £500 limit might be extinguished very quickly (perhaps even on the first medical consultation), remember that compensation for (or correction of) personal injury may be subject to completely different principles, especially if the injury was deemed to have been caused at work, and that further exemptions may then be due.

It may have been helpful for HMRC to set out these additional principles as part of the explanatory guidance that accompanied the announcement of this modest new £500 exemption, but if you do with to discuss these matters in more detail please contact ET4B.