Health tax incentives could boost economy by £2.65bn, CBI suggests
Worker health tax incentives could offer a £2.65bn boost to the economy, a leading business group has suggested.
Making employee assistance programmes (EAPs) full tax-free benefits, to help firms support staff members’ mental health and wellbeing, could generate £10 for each £1 spent, analysis has found.
The research into the productivity boost, conducted by the Confederation of British Industry (CBI), comes ahead of the new Labour government delivering its first budget this autumn.
Revealed today, the CBI has found the measure could help ease labour market pressures, amounting to a £2.65bn boost to Britain’s GDP over the next four years.
Rules on tax relief for employer-funded medical treatment via occupational health specialists being relaxed could also generate £5 for every £1 spent by the Treasury.
It comes as the government estimates some 2.8m people in the UK are out of work due to long-term ill health, with 38 per cent of UK firms have refused growth opportunities due to labour shortages, according to a previous CBI/Pertemps report.
But 49 per cent of firms said reforms would incentivise investment in the health of their staff.
CBI chief executive Rain Newton-Smith commented: “A healthy economy needs a healthy workforce. We’re seeing vast numbers of people unable to work due to ill health, at a time when firms are crying out for more talent.
“There is an indisputable case for business and government to work together… firms are keen to play a more proactive role in employees’ health, but the tax system discourages it.”
Newton-Smith added: ““Businesses tell us that the most effective measures for employee health interventions are those that are preventative.
“If health conditions are detected early, they can be treated more easily and at a lower cost, leading to less time off work.
“The upcoming autumn Budget is a crucial opportunity for the government to act on employee health tax incentives – and the CBI stands ready to work hand-in-hand with politicians to boost the health of our workforce.”
Additional measures the CBI is recommending include: abolishing the ‘one per employee, per tax year’ limit on tax-free health screenings and medical check-ups; introducing a new new statutory tax exemption for adult vaccinations and virus and disease testing; and ensuring tax relief covers all staff health and safety eye tests, glasses and contact lenses.