Menopause and mental health support can be tax-free

HMRC's updated guidance confirms that welfare counselling covering menopause, mental health, stress, bereavement and other personal difficulties can be provided without creating an income tax or NI liability. However, menopause support must be distinguished from medical treatment, which is not generally covered by this exemption. Certain therapies, including cognitive behavioural therapy, can qualify where provided as part of an employer's welfare counselling services.

The exemption also excludes general financial, legal and tax advice, although counselling about debt problems is permitted. This can cause difficulties where employee assistance programmes combine several types of support. Strictly, including non-qualifying services can put the exemption for the entire package at risk, although HMRC accepts a common-sense approach where these are insignificant. Employers should review their wellbeing packages and, where possible, separate qualifying counselling from other services to preserve the tax-free treatment.