Treasury U-turn on Covid test tax
The news comes after it the chair of the House of Commons Treasury committee Mel Stride raised concerns that tests offered by employers would be treated as a benefit in kind for tax purposes.
A benefit in kind has a cash value assigned, and employees pay income tax on this amount through the PAYE system.
Treating coronavirus tests provided by employers as a benefit in kind would mean an increased tax bill for frontline workers including those working in healthcare.
Stride wrote to Chancellor Rishi Sunak asking him to look into the matter. He warned that the policy could deter workers from taking employer-provided tests.
The Treasury has now confirmed that it will introduce an income tax exemption for the tests.
“Given the importance of widespread testing, we want to ensure that all employers who wish to provide third party testing to their employees can do so without increasing their tax liability,” a spokesperson told Sky News, “So we will introduce a new income tax exemption for COVID-19 antigen tests provided by employers. HMRC will amend their guidance as soon as possible to reflect this change.”