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Published: July 28, 2020

HMRC scraps Benefit in Kind Charge on COVID-19 Tests

Following an outcry from MPs, HMRC had to remove its Benefit in Kind section from it’s updated Guidance.
BIK on Covid-19 tests

HMRC was forced to hastily scrap its move to make UK employees face a taxable benefit in kind when their employer pays for coronavirus testing, reported, accountancydaily.co

Following an outcry from MPs, HMRC had to remove its benefits in kind section from it’s updated guidance on how to treat certain expenses and benefits provided to employees during the COVID-19 crisis which HMRC put out earlier this month (July 2020). The guidance stated that if an employer paid for a coronavirus test, their employee would be required to pay income tax on that benefit. 

The Treasury select committee, among others, points out that as many employers will require these tests on a regular basis, the tax bills could soon mount up.

Treasury select committee chair, Mel Stride, wrote to the Chancellor of the Exchequer Rishi Sunak asking him to look into the matter as soon as possible.

Stride said: ‘Many employees, especially healthcare and hospitality workers, are required to undergo regular coronavirus testing. This new guidance 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.’

‘This cannot be right.’ (source)

Consequently, HMRC quickly removed the information about ‘Coronavirus (COVID-19) tests’ from the guidance. 

You can read HMRC’s guidance on expenses and benefits during coronavirus here.

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