Employees are to pay additional tax for workplace COVID-19 testing

Health and social care workers could face a large tax bill. New guidance from HM Revenue and Customs (HMRC) could […]

Matt Bodell
7 July 2020
COVID testing

Health and social care workers could face a large tax bill.

New guidance from HM Revenue and Customs (HMRC) could see frontline health and social care workers pay additional tax for COVID-19 testing.

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According to the new guidance, COVID-19 testing undertaken at the expense of an employer is to be treated as a “benefit in kind”, so will be subject to extra income tax for employees.

The guidance states; “Coronavirus (Covid-19) testing kits or tests carried out by a third party which have been purchased by you to provide to your employees are treated as a taxable benefit in kind on the employee.”

Treasury Committee Chairman Mel Stride has warned that for some employees, like health and social care workers, who require regular testing the tax bill could quickly mount up.

“Many employees, especially healthcare and hospitality workers, are required to undergo regular coronavirus testing,” said Mr Stride.

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He said the new guidance from HMRC “is unclear and will worry a large number of workers”.

“Many of our key workers could be faced with the perverse incentive of avoiding employer-sponsored tests in order to reduce their tax bill,” he added.

According to the Citizens Advice Beaureu, Benefits in kind are benefits which employees or directors receive from their employment but which are not included in their salary cheque or wages – like a company car or mobile phone.

When questioned on the guidance earlier today, Chancellor Rishi Sunak said he will look into the issue “very quickly”.

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