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Benefits in Kind: Coronavirus

Coronavirus test tax exemption

The government has decided to exempt employees from tax where their employers pay for them to be tested for coronavirus. However, the exemption is limited.

What do you need to know?


Change of policy.

In July 2020 HMRC published guidance stating that employees would be taxed on a benefit in kind where their employers paid for them to be tested for coronavirus. Naturally, there was a public outcry. This resulted in the government changing its policy and announcing a tax exemption for employer-paid tests with effect from 8 December 2020. However, before relying on the exemption employers should check the small print.


Limited exemption. There are two types of tests; one to check if someone currently has coronavirus, the antigen test, and the other to check whether someone carries the antibodies showing that they have already had the virus. The exemption only applies to coronavirus antigen tests.


Tests before 8 December. The exemption for antigen testing applies to tests undertaken between 8 December 2020 and 5 April 2021. However, HMRC will use its discretionary powers to waive tax and NI bills for any relevant tests paid for by employers which have been provided between 6 April 2020 and when the exemption takes effect.