Explanatory note

Section 320C of the Income Tax (Earnings and Pensions) Act 2003 (c.1) (“ITEPA 2003”) excludes from liability to income tax the funding by an employer of medical treatment which is recommended to an employee as part of an occupational health service for the purposes of assisting the employee to return to work after a period of absence due to injury or ill health.

The exemption will apply to expenditure up to a cap of £500 per tax-year per employee, where the recommendation for medical treatment meets the conditions set out in sections 320C(3)(a) and (b) of ITEPA 2003 and any other requirements specified in regulations.

These Regulations specify the additional requirements that are to apply to a recommendation for medical treatment.

A Tax Information and Impact Note covering this instrument was published on 10th December 2013 alongside the draft clauses and explanatory notes for Finance Bill 2014 and is available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm. It remains an accurate summary of the impacts that apply to this instrument.