Attracting and retaining talented employees continues to be a challenge for many employers, particularly as expectations around wellbeing at work grow.
While many businesses offer benefits to stand out, fewer realise that annual health screenings and certain medical check‑ups can be provided in a highly tax‑efficient way.
When structured correctly, these benefits are exempt from income tax and National Insurance contributions, making them an attractive option for both employers and employees.
Why employers are turning to health screenings
HMRC allows employers to provide one health‑screening assessment and one medical check‑up per employee, each tax year, without creating a taxable benefit‑in‑kind.
Where the exemption applies:
This makes health screenings notably more tax-efficient than many other wellbeing benefits, which often result in additional tax and payroll reporting obligations.
The important difference between screening and check‑ups
To apply the exemption correctly, it is important to understand the distinction HMRC makes between the two types of preventative health benefit.
Health‑screening assessments – These are designed to identify employees who may be at risk of ill health, rather than to diagnose conditions.
They commonly involve health or lifestyle questionnaires, telephone or digital assessments and risk‑profiling exercises that may indicate whether further investigation is appropriate.
The key point is that the purpose is early identification and prevention, not treatment.
Medical check‑ups – A medical check‑up is a physical examination carried out by a qualified health professional to assess an employee’s general health.
There is no requirement for an employee to complete a health‑screening assessment first for a check‑up to qualify for the exemption.
However, medical examinations that are connected to diagnosing or treating an existing condition do not fall within the scope of this tax and NI exemption.
Flexible delivery options
The exemption is not restricted to traditional in‑person appointments. Employers may also provide access to qualifying health screenings or check‑ups through non‑cash vouchers, digital credits or wellbeing platforms. These can only be used for services that meet HMRC’s criteria.
This flexibility allows employers to fit health benefits neatly into modern benefit programmes without adding unnecessary administration.
Important limitations to be aware of
Although the rules are generous, there are boundaries that employers must observe.
Where health screenings or medical check‑ups are provided for an employee’s spouse, partner or family member, the cost will usually be treated as a taxable benefit unless that individual is also an employee of the business.
Similarly, the exemption does not apply to medical care that is linked to ongoing treatment, although other, more limited reliefs may sometimes be available and should be reviewed separately.
For employees who work for more than one employer at the same time, such as directors across a group of companies, the annual limit of one screening and one check‑up applies across the group as a whole, not to each company individually.
A practical and tax‑efficient option for employers
From an employer’s perspective, offering health screenings can improve wellbeing, support early identification of health issues, help reduce long‑term absence and enhance the overall employee experience.
From a tax standpoint, it is a rare example of a meaningful benefit that does not automatically increase employment taxes, provided HMRC’s conditions are met.
If you would like advice on introducing health screenings, reviewing your existing employee benefits, or exploring other tax‑efficient remuneration strategies, our team would be pleased to help.
