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How to treat certain expenses and benefits provided to employees during coronavirus (COVID-19)
On 09 July 2020, HMRC updated the above guidance. This is all about the treatment of expenses and benefits where they are provided to employees as a result of the COVID-19 pandemic. Plus, as well as the tax treatment, it advises on the employer’s reporting obligations. Note that this guidance does not advise on the National Insurance treatment which, helpfully, may differ.
The guidance was updated with the addition of information in two places:
Coronavirus (COVID-19) Tests
The updated guidance says that:
- A Government-provided test (UK, Welsh, Scottish or Northern Ireland Executive) is not to be treated as a taxable benefit.
- Employer-provided test kits, separate from Government-provided tests, are also not to be treated as a taxable benefit.
Therefore, test or kit and regardless of how this is provided, there is no tax obligation and no requirement to report to HMRC. Legislation will follow in the form of Regulations.
Personal Protective Equipment (PPE)
This part concerns employers who have carried out risk assessments that shows that the provision of PPE is required for the employee to be able to do their job. Where the risk assessment shows that these are warranted, the employer must provide these free of charge:
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- If they are provided to the employee by the employer, the provision is non-taxable, is not a benefit-in-kind and does not have to be reported to HMRC
- If the employer is unable to provide them and reimburses the actual amount incurred by the employee in purchasing PPE, this is similarly non-taxable, is not a benefit-in-kind and does not have to be reported to HMRC