Coronavirus testing kits classed as taxable benefit in kind

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Workers who receive coronavirus tests paid for by their employer will need to pay income tax on them, it has been revealed.

New guidance issued by HM Revenue & Customs states that Covid-19 testing kits or tests carried out by a third party, which have been purchased by an employer for its employees, are treated as a taxable benefit in kind.

Meanwhile, personal protective equipment, provided by an employer to staff where working in a situation where the risk of coronavirus transmission is high, is non-taxable.

The classification of testing kits as a benefit in kind has been criticised by Treasury Committee chairman Mel Stride, who has asked chancellor Rishi Sunak to look into the issue as soon as possible.

He said: “Many employees, especially healthcare and hospitality workers, are required to undergo regular coronavirus testing.

“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.”

Sunak told MPs on Tuesday that he would look into the issue “very quickly”.

Organisations in some sectors including healthcare and hospitality are undergoing weekly coronavirus tests for the safety of their colleagues and visitors.

Guidance published by the Information Commissioner’s Office in May said that employers still needed to comply with the General Data Protection Regulation and Data Protection Act when handling Covid-19 test data.

They can keep lists of employees who have had symptoms or tested as positive, but they need to ensure the processing of this data is “necessary and relevant for the stated purpose”.