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January 12, 2021

ATT calls for extension of tax free treatment of employee Covid-19 testing

By Joe Pickard

The Association of Taxation Technicians (ATT) has called for tax exemptions for employer-funded Covid-19 test to be extended beyond April 5 2021.

In the UK, it is not treated as a taxable benefit when an employer pays for or reimburses an employee for a Covid-19 test.

Without these exemptions says ATT, an employer paying for an employee’s test would be providing a benefit equal to the cost of the test. This can lead to income tax and/or national insurance costs for both the employee and employer.

ATT president Jeremy Coker said: “The Government must extend the very welcome income tax and national insurance exemptions for employer-funded testing until at least 5 April 2022 given the ongoing pandemic. There would be a real public benefit in encouraging employers to support such testing. Key workers in particular should not be hit by tax charges if their employer pays for them to be tested.”

“In our Budget representation, we suggest the Government could go even further, and that there would be a public benefit in introducing a wider-ranging and enduring exception from taxable benefits for employers who fund employee-testing for any highly transmissible disease.”

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