ATT Technical Officer The Association of Taxation Technicians
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U-turn on taxing employer-provided Covid-19 tests


At the start of July, there was a bit of hokey-cokey with guidance on the taxability of coronavirus tests. First, the guidance was in, then out and then in again – all shaken about and turned around. So what happened?

14th Jul 2020
ATT Technical Officer The Association of Taxation Technicians
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On 6 July – conveniently the deadline for submitting 2019-20 P11Ds - HMRC updated their guidance on provision of certain benefits to employees during coronavirus to say that employer-provided coronavirus testing would be a taxable benefit in kind.

This provoked a good deal of concern – with the good folk of #TaxTwitter kicking off the debate on whether an employer-provided coronavirus test really was a benefit in kind for staff, or if it could be argued that any personal benefit in actually knowing your Covid-19 status was incidental.

Fortunately, the Treasury Committee was also concerned, with their Chair, Mel Stride, writing to the Chancellor on 7 July expressing concerns that it was “not a helpful policy” and ran the “risk of deterring workers from taking employer sponsored tests”.

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Replies (2)

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Sarah Bradford
By Sarah Bradford
15th Sep 2020 14:11

The guidance at EIM21863 which distinguishes between seasonal flu jabs and pandemic immunisations applies prior to the introduction of the statutory exemption for trivial benefits with effect from 6 April 2016. Thus, for Covid-19 tests and vaccines not covered by a specific exemption, the trivial benefits exemption should be available if the cost per employee is £50 or less.

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By BruceMeeks
19th Oct 2021 12:38

Probably the only viable way to get rid of the tax exemption on health care compensation is, ironically, a single payer system removed from employer participation. It would come, of course, with a huge increase in taxes. But, that tax increase could be largely (or even wholly) offset by requiring employers to adjust compensation for the fair value of the plans they no longer are required to provide as compensation.

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