Calls for UK government to extend tax exemption on employee COVID-19 tests 

The UK government recently introduced an Income Tax exemption on coronavirus antigen tests for employees. The tax exemption came into effect on 8th December 2020 and is expected to end on 5th April 2021.

The Association of Taxation Technicians (ATT) is calling for the tax exemption to be extended beyond 5th April 2021. The current exemptions allow for employers to provide their employees with a coronavirus antigen test without it being treated as a taxable benefit.

Without this exemption in place, any employer funding a coronavirus antigen test, for their employees, would be seen as providing a benefit. A benefit can be subject to Income Tax and/or National Insurance costs for both the employer and employee.

The ATT is calling for an extension to the tax exemption, until at least 5th April 2022, given the current circumstances of the pandemic. Without the extension, any employee who receives a test from their employer after 5th April 2021, could receive an increased Income Tax bill.

See our article on ‘Income Tax and National Insurance contributions exempt for coronavirus antigen tests provided by employers’ for further information on the tax exemption.