Regulations on welfare counselling have been issued as statutory instrument SI 2000 No 2080. These regulations allow an employer to provide welfare counselling and similar benefits to an employee without its being regarded as a taxable benefit. The regulations apply from 21 August 2000.
Welfare counselling includes all forms of assistance provided to employees to help them with their personal problems. This can include dealing with stress, bereavement, broken relationships, family illness and similar worries. It has been estimated that every £1 spent on such services saves the employer £15 in costs. Most of these cost savings are in reduced absenteeism, lower staff turnover and greater motivation.
The scope of welfare counselling comprises all forms of counselling and similar pastoral support except:
- medical treatment of any kind;
- advice on financial matters (except that advice on debt is regarded as allowable welfare counselling);
- tax advice;
- advice on leisure or recreation; and
- legal advice.
Welfare counselling other than those excepted above do not create a taxable benefit in the hands of the employee. Some of the exceptions contained above may be exempt under other tax provisions, for example medical treatment is not a taxable benefit when provided in the context of an employee travelling overseas on business.
Income Tax (Benefits in Kind) (Exemption for Welfare Counselling) Regulations SI 2000 No 2080
[2000]