Tax treatment of COVID-19 tests
08 January 2021
HMRC has updated guidance in relation to how to treat certain expenses and benefits provided to employees during coronavirus (COVID-19), to include additional information on the tax treatment of COVID-19 tests.
The updated information page confirms that, where coronavirus tests are provided by the government, as part of its national testing scheme, they will not be treated as a benefit in kind for the purposes of tax. What this means is that, where businesses employ healthcare workers or any other front-line staff who are eligible to receive a test through this programme, no tax is due and there is no requirement to report a benefit to HMRC.
There is further information on the scheme available, which advises essential workers on how they can get a coronavirus test.
Where businesses offer antigen test kits to their employees outside of the national testing scheme, irrespective if this is done directly or through buying tests carried out by a third party, then no tax or Class 1A National Insurance (NI) contributions will be due. Additionally, employers and their employees will not be required to pay tax or NI contributions in scenarios where an employee receives money from their employer for purchasing a test.
Guidance will be updated in due course, and the government is currently legislating for this through regulations.
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.