The Chancellor’s budget announcement that tax relief on employee assistance programmes (EAPs) will be scrapped has been criticised by the industry’s professional body.
The UK Employee Assistance Professionals Association (EAPA) said it was “very disappointed” that the government had decided to categorise the schemes as an employee benefit, and therefore exempt from tax relief.
“Although the exact detail surrounding how the removal of tax relief for EAPs will actually take effect is yet to be released, the EAPA is very disappointed that the government has chosen to classify EAPs as an employee benefit, rather than the strategic intervention that over 5,200 organisations in the UK have invested in,” said chairman David Smith.
Smith added that EAPs were even more vital in challenging economic times, as staff may be facing greater financial and emotional pressures.
“The slower growth predictions, higher inflation and higher living costs highlighted in the budget signal that EAPs have never been needed more by organisations and individual employees,” he continued. “In fact, in this climate EAPs will now have a greater role to support employees and assist workers and their employers when it comes to addressing issues and problems that may affect performance.”
George Osborne confirmed the government’s move in his budget speech, after last week’s report from the Office for Tax Simplification recommended that EAPs be stripped of tax relief, while other benefits such as childcare and cycle-to-work schemes remain tax exempt.