Health care firms to receive tax 'super deduction'

Chancellor of the Exchequer Jeremy Hunt is considering introducing tax incentives for healthcare providers. Ministers.

Chancellor of the Exchequer Jeremy Hunt is considering a «super deduction» rebate for firms that fund flu shots and regular staff checkups. The scheme would mean that the more money a company spends on the welfare of its employees, the less tax it will have to pay on total profits.

Doctors and nurses retiring from the NHS will be asked to take a job in the private sector so that there are enough medical professionals to fulfill the plan.

This is part of a broader strategy devised by the government to tackle high levels of economic inactivity and get more Britons back to work. Ministers hope that encouraging businesses, especially small ones, to provide medical care to their employees will reduce the burden on the health service.

Reducing the number of unemployed and long-term sick people, which has reached a record level of 2.55 million people, will also lead to a reduction in the benefit bill.

Mr. Hunt said: “Increased employment improves living standards and helps businesses grow. While unemployment is low by historical standards, there has been a significant increase in the number of economically inactive people since the Covid-19 pandemic.

«Maintaining labor force participation is critical to ensuring we have enough workers to meet the UK's future needs and maximize productivity growth.»

The planned super deduction will see companies rewarded with more than 100% tax relief when they spend on certain types of staff health care.

In particular, the government wants to encourage firms to pay for regular medical checkups and health checks to keep their employees healthy. Treatments such as physical therapy and help with stress and anxiety will also be eligible, as will reimbursement for flu vaccinations.

Employee Benefit

Mr. Hunt plans to expand in-kind benefits to the same areas so that employees are not taxed for receiving care, as is currently the case.

When he was chancellor, Rishi Sunak introduced a 130 percent super deduction on the purchase of factory equipment for manufacturers. For every £1 spent, companies received a full rebate on equipment, as well as an additional up to 25p deducted from their general income tax.

Getting more people back to work, including those over 50 who retired early, is key to growing the economy and filling workforce gaps. The total number of Britons who are economically inactive, i.e. those who are unemployed and not looking for one, has risen sharply since the pandemic and now stands at 8.65 million.

Illness has accounted for most of this increase, with 438,000 more people added to the long-term sick list in the first three months of this year. Mental health problems such as stress, depression and anxiety, as well as physical conditions such as neck and back pain, are the main causes of long-term illness.