Minor benefits

Tucked away in the corner of the employment income tax legislation is an exemption for so-called minor benefits. This isn’t to be confused with trivial benefits – there are separate and distinct rules that apply to any type of perk that costs an employer less than £50 per employee to provide. By contrast, the minor benefits exemption is more generous but specific to particular perks.

Counselling or therapy

Employer-paid-for counselling for staff welfare is a tax and NI-exempt benefit. The exemption applies where the offer to pay for counselling is open to any of your employees (including directors, even if yours is a one-man company) who may need it. For obvious reasons this might prove to be a very popular tax-free perk over the coming months and counsellors could be one of the boom industries to thrive from the pandemic.

What’s changed?

Until now the exemption didn’t extend to counselling that was considered medical treatment. But from 6 April 2020 it does. This means employers can pay for therapy that constitutes medical treatment without having to report it as a taxable benefit on FormP11D or pay Class 1A NI.

The exemption for minor benefits in kind for staff welfare is wider from 6 April 2020. Employers can pay for therapy sessions for employees and directors without it counting as a taxable perk.