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”.

The guidance disappeared from GOV.UK the same day, and in Parliament on 8 July the Chancellor confirmed that the matter was being looked into as a matter of urgency.

The following day, the guidance was back but this time to confirm that tests through the government’s national testing scheme would be exempt – as would any antigen testing kits provided to employees. In due course, this guidance will be backed up by regulations, when the question will be if they go far enough.

Antigen exemption

Very broadly, there are two types of test – tests which say if you have coronavirus at the time of the test, and tests which tell you if you have had it in the past.

The guidance suggests that we can expect an exemption for employer-provided antigen tests. I don’t have any medical expertise and the use of terminology is not always consistent, but the terminology in this earlier GOV.UK article indicates that the term antigen only refers to testing of live cases, with past case testing coming under the heading antibody testing.

On this basis, tests for live cases would be exempt, but employers providing tests to employees to see if they have had the virus would not be. Hopefully, the regulations will make it clear exactly which tests are intended to be exempted.

In practice, most people with symptoms and those in the medical sector who need regular testing will be tested via the national testing scheme. The exemption for live testing is therefore needed in other situations such as where, say, a plumbing firm pays for its staff be tested before visiting the homes of vulnerable people, or a business wants to confirm staff are not infected before or after travel.

If antibody testing is not covered, the question is whether or not it should be – is there a business need for employers to be able to determine if staff have had the virus? Since, at present, that information does not change how staff are advised to behave in work, it is more arguably a personal benefit – unlike knowing if an employee is currently suffering from Covid-19 which can affect other staff, the business and customers.


The other big question – assuming an effective enough one is developed – is whether or not any Covid-19 vaccine provided by an employer will be considered a benefit in kind.

It is possible too that, this year, more employers will want to encourage staff to take up seasonal flu jabs. Even though a flu jab won’t protect against Covid-19, there are enough overlapping symptoms that it would be helpful to reduce incidents of flu in the workplace.

Much has been made on social media of existing guidance on flu jabs as, perhaps surprisingly, HMRC’s manuals specifically distinguish between seasonal flu jabs and pandemic flu, with the former exempted from tax as a trivial benefit, but not the latter.

What appears to have been overlooked is that these are the rules that apply prior to 6 April 2016, when a statutory trivial benefit rule was introduced. Under the current rules, a specific tax relief for any pandemic or flu vaccine will only be needed if the cost exceeds £50 per head. (This cash limit is also another reason for needing specific exemption for COVID-19 testing, with all the private testing offers I have seen online exceeding £50.)


It was inevitable that the existing tax code wasn’t going to cope with all the new circumstances that the pandemic has brought, and no doubt there will be other situations that need ‘fixing’ as time passes. While the flip-flopping on the Covid-19 testing was unhelpful, thankfully this issue was taken in hand quickly and a resolution is now in progress.

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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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