The new Income Tax exemption came into effect from 8th December 2020 in relation to employers providing their employees with a coronavirus antigen test.
This new temporary exemption will ensure that employees who are given a relevant coronavirus antigen test, will not be liable to an Income Tax benefit in kind charge. A benefit in kind is where an employer provides an employment-related benefit to an employee and is therefore subject to Income Tax.
Employers will also be exempt from making Class 1A National Insurance contributions on the provision of a coronavirus antigen test.
The exemption will be in effect from 8th December 2020 until 5th April 2021. To be eligible employers must provide all their employees with a relevant coronavirus antigen test. Antibody tests do not qualify under the tax exemption.
HMRC have introduced this measure to reduce the financial burdens on employees and employers paying Class 1A National Insurance contributions on a coronavirus antigen test. The tax exemption will be introduced under section 210 (2) of the Income Tax (Earnings and Pensions) Act.