EMPLOYEE ASSISTANCE PROGRAMMES
CIPD criticises government plans to tax wellbeing initiatives
Plans by HM Revenue & Customs (HMRC) to tax employee assistance programmes will not help the government in its bid to reduce stress caused by financial concerns and should be scrapped, according to the Chartered Institute of Personnel and Development.
%ADVERT%
Services offered under an employee assistance programmes (EAP) have traditionally been defined as “welfare counselling” and are therefore tax-exempt benefits, but HMRC is now taking a sterner view of the programmes, on the grounds that they can include financial and legal assistance.
Charles Cotton, CIPD pay and benefits adviser, said: “CIPD research shows employers are increasingly focusing on the wellbeing of their workforce. However, the large majority of employers operating an EAP would consider withdrawing it if it becomes a taxable benefit."
He added: “Taxing EAPs just doesn’t make sense. It could destroy the government’s attempts to improve the financial understanding of the population and reduce stress caused by debt. The HM Revenue & Customs needs to recognise that EAPs are not usually used by the wealthy for legal and financial advice but by those on lower earnings.
Cotton reckons that splitting the financial and legal elements from the other parts of an EAP would also be a headache for providers. He said: “If an employee calls a helpline because they are stressed and then wants to talk about their finances and debts, it wouldn’t make sense for the helpline provider to end the conversation because that could be the clinical root of their problem.”
A final word
“Nothing within the employee assistance programme service can be seen as delivering a monetary benefit so how can they justify a tax? The legal and financial services provided within an EAP are offered within a mental health model to help people cope with their concern and find a way forward.
As well as the presenting problem, people using our helpline will often have a secondary and tertiary issue which are all related. Therefore, to try and separate out services from an EAP would undermine the intrinsic value of being able to access multiple services for multiple faceted issues.” - Eric Marshall, Chair of Employee Assistance Professionals Association (EAPA) and Financial Director of PPC Worldwide.
Want to know more?
The Chartered Institute of Personnel and Development (CIPD) has over 127,500 members and is the leading professional institute for those involved in the management and development of people. For more details visit www.cipd.co.uk
The EAPA is the professional body for employee assistance programmes. It represents the interests of professionals concerned with employee assistance, psychological health and well being in the UK. EAPA members include external and internal EAP providers, purchasers, counsellors, consultants and trainers. For more details visit www.eapa.org.uk