Government sickness absence review: tax relief should apply to PMI but not IP

"I worry that tax incentives with conditions are short-termist in that they can be talked about, offered and taken away when they could be so much more strategic," he said. "Health in the workplace is more fundamental than tax incentives and will be invested in more when employers see the return on their investment – as the productivity gains are proven so such programmes will gain mainstream traction."

The review estimates that the costs in reduced tax receipts (around £150m) of extending tax relief would be outweighed by gains of £250 for employers through reductions in lost output as sick employees return to work sooner.

It is estimated that employers currently pay £9bn a year in sick pay and associated costs of absence. They are not currently required to manage sickness absence in any particular way or to rehabilitate staff, although they must comply with disability provisions under the Equality Act (2010).

The Government commissioned the independent review of sickness absence in February, alongside its plans for radical welfare reform. It has been led by Dame Black and David Frost, former director general of the British Chambers of Commerce.



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