Will the rise in IPT impact your employee wellbeing offering?
Last week we heard from the Chancellor, Philip Hammond, on his taxation and spending plans for the coming months in his Autumn Statement.
I was surprised by one aspect in particular; that the level of Insurance Premium Tax (IPT) is set to rise – again. The announced rise of 2% will see IPT hit 12% from the 1st June 2017. The proposed 2% increase follows on from a 0.5% increase in the 2016 Budget, three increases in 18 months alone.
We actively promote wellbeing in the workplace, in fact we’ve even produced a guide on the subject. We know that health and productivity is closely linked, and keeping employees healthy and happy is important to employers. So, one of the ways to do this, is to offer employees access to one, or a number of healthcare benefits.
I’m sure, that for many employers, this increase will have some sort of impact on their healthcare provision. The most obvious of course will be an increase in the cost of providing benefits including; private medical insurance (PMI), dental cover and cash plans.
Employers work hard to offer a varied, useful range of benefits to their employees, but could we see this coming to an end? Unlikely for the most part, as of course employee benefits are an essential part of any reward and remuneration package. But I believe the rise could lead to some employers potentially stopping these benefits altogether, whilst others may simply only choose to offer these benefits to certain groups of staff, or offer a more dilute proposition.
I’m sure the majority of HR and Benefits Managers are finding it difficult to justify another rise in costs and budget when feeling they may not be getting much of an improved return on investment. But, I would urge employers to look at the bigger picture and the link between employee health and wellbeing. Healthcare benefits can play a major role in employee wellbeing; including employees recovery from illness and returning to work.
By Morag Livingston, Group Risk and Healthcare Manager, Secondsight