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News added on 20.07.2020

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Coronavirus

What's the tax treatment of private coronavirus tests?

Many employers are considering the introduction of coronavirus testing as a way to keep their staff safe. If you offer private tests to your employees, what's the tax position?

You will generally need employees’ express consent to carry out coronavirus testing on them in relation to most job roles, although it may be possible to require it where there’s a good reason to do so, such as for those working in health and social care. Therefore, it’s best to make any private testing a voluntary process. In addition, you’ll need to comply with data protection laws before introducing any testing programme, including conducting a data protection impact assessment, adhering to the GDPR data protection principles, having a lawful basis for processing and also meeting an additional lawful condition for processing (as health data constitutes special category data).

Although the HMRC guidance originally stated that coronavirus tests paid for by employers would be treated as benefits in kind and subject to income tax accordingly, that policy has now been changed. The guidance now states that if you provide coronavirus testing kits to your employees, outside of the government’s national testing scheme, either directly or by purchasing tests that are carried out by a third party, no income tax or Class 1A NI contributions will be due. The government is to legislate for this through regulations, and the guidance will then be updated again.

In addition, the guidance confirms that the provision of personal protective equipment (PPE) to employees is non-taxable in certain circumstances:

  • it's for employees working in a situation where the risk of coronavirus transmission is very high and your risk assessment identifies that PPE is required (in such cases, the PPE must be provided free of charge)
  • your reimbursement of the actual expenses of employees who purchase PPE themselves, where the PPE is required to carry out their role and you are unable to provide it.

If you’re providing coronavirus antigen testing kits to your employees, outside of the national testing scheme, it’s not treated as a benefit in kind for tax purposes and so no income tax or Class 1A NI contributions will be due.

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