Staff health screeninmg. Legitimate expense or BIK?

[Brown and Boris]

As a two man band I wonder how HMRC would view it if we had the business pay for some health screening for us both? Heading of illness has to be good for business? I work with one client who provides head massge, anti-smoking sessions and yoga classes, all on the firm and all in firms time.

[Eric Mc]

I think it would need to be proved that it was "wholly and exclusively for the purpose of the trade". Paying for a pilot's medical would probably qualify but paying for your typists weekend at a country spa hotel wouldn't.

[Brown and Boris]

Eric Mc said:

I think it would need to be proved that it was "wholly and exclusively for the purpose of the trade". Paying for a pilot's medical would probably qualify but paying for your typists weekend at a country spa hotel wouldn't.

I am thinking of medical screening for the two directors Eric, simply because of the risk to the business if either of us were unfit for work for along period (or worse). My co-director was off work for 4 months in 2007 with a tumour which had it been spotted earlier could have been dealt with as day surgery instead of major surgery. Luckily we were quiet and I managed to fullfil the contracts we had but had we been busy we would have have been unable to meet our obligations. I am thinking about annual medicals and Cholesterol, diabetes and liver function tests and eye examinations because of the fact we sometimes read for 8 hours a day.

[530dTPhil]

Health screening for senior managers in our business has always been treated as allowable by HMRC, but obviously the provision of private medical health insurance is considered as BIK.

[Eric Mc]

I would say go ahead and make the claim.

It's rather like "normal" health insurance and "keyman" health insurance. The first is not allowable but the second is. The difference being that "keyman" insurance is geared specifically for ensuring the BUSINESS is covered - not the individual. If you could argue a similar case for such health screening you might be able to make a successful claim.

I am, of course, talking about the eligibility of the cost as a "Schedule D" type business expense.

There is also the BIK aspect to consider as well.

Edited by Eric Mc on Sunday 8th February 09:40

[skwdenyer]

Eric Mc said:

I would say go ahead and make the claim.

It's rather like "normal" health insurance and "keyman" health insurance. The first is not allowable but the second is. The difference being that "keyman" insurance is geared specifically for ensuring the BUSINESS is covered - not the individual. If you could argue a similar case for such health screening you might be able to make a successful claim.

I am, of course, talking about the eligibility of the cost as a "Schedule D" type business expense.

There is also the BIK aspect to consider as well.

Edited by Eric Mc on Sunday 8th February 09:40

Is there a BiK? Is it considered a "benefit" if the process tells you you're going to die?

Would it not be that case that, if allowable as a key man expense, and especially if written into a Director's service contract ("you MUST attend screening every six months"), there would be no BiK? Is not the analogy that of tied housing, not free spa weekends?

[BigAlinEmbra]

skwdenyer said:

Eric Mc said:

I would say go ahead and make the claim.

It's rather like "normal" health insurance and "keyman" health insurance. The first is not allowable but the second is. The difference being that "keyman" insurance is geared specifically for ensuring the BUSINESS is covered - not the individual. If you could argue a similar case for such health screening you might be able to make a successful claim.

I am, of course, talking about the eligibility of the cost as a "Schedule D" type business expense.

There is also the BIK aspect to consider as well.

Edited by Eric Mc on Sunday 8th February 09:40

Is there a BiK? Is it considered a "benefit" if the process tells you you're going to die?

Well you're effectively paying for private treatment that the individual could have done so themselves.

[Eric Mc]

There would be a BIK if the health screening was not crucial to the director's role in the business. Merely keeping him alive probably wouldn't qualify as BIK free.

[skwdenyer]

Eric Mc said:

There would be a BIK if the health screening was not crucial to the director's role in the business. Merely keeping him alive probably wouldn't qualify as BIK free.

But if it were, for instance, a condition of key man insurance?

On another tack, companies have demanded periodic medicals for decades, without my ever having seen any mention of a BiK. How is "health screening" more than a fancy term for "a medical"?

[Eric Mc]

I think the "allowability" of the cost would very much depend on how "essential" that cost is to the business. The Revenue, on the whole, DO NOT allow these types of costs UNLESS the costs can truly be shown to have a serious business relevance. Merely paying for someone's health check when their normal health is not of vital importance to their job would not be claimable and would definitely constitute a BIK.

Certain jobs demand that a persion achieve certain levels of fitness - e.g. pilots, fireman, footballers and costs incurred checking people like that out would probably be allowable.