Employer-provided coronavirus tests and PPE

In an unusually fast-moving development, HMRC appears to have confirmed and then abandoned its policy of treating the provision of coronavirus tests by an employer to its employees as a benefit in kind.

HMRC had recently updated its guidance How to treat certain expenses and benefits provided to employees during coronavirus (Covid-19’ to cover the different tax treatment of coronavirus tests and items of PPE provided by employers to employees.

The guidance confirmed that coronavirus testing kits, and tests carried out by a third party, purchased by an employer and provided to its employees, would be treated as a taxable benefit in kind on the employee. The guidance did not mention frontline health and social care staff or other employees likely to need tests on a regular basis. In a letter to the chancellor, Mel Stride, chair of the Treasury Select Committee, urged the government to reconsider, noting that the policy ‘risks deterring workers from taking employer-sponsored tests’ and that many of those affected will be in frontline jobs in hospitals and other similar settings, and it seems wrong that a disproportionate tax burden should fall on them at this time’.

Following the intervention, and general objection in the wider media, the section on coronavirus tests was removed from HMRC’s guidance on the morning of Wednesday 8 July, suggesting a possible change of view.

The treatment of PPE is less controversial. Where an employer’s risk assessment shows that PPE is required in the workplace, the PPE must be provided by the employer free of charge. Such provision is not a taxable benefit. If the employer is unable to provide necessary PPE, it must reimburse the actual expenses of employees who purchase the PPE directly. Again, this is non-taxable on the employee.