The government has scrapped plans to get workers to pay income tax on coronavirus (COVID-19) testing kits purchased by their employer.
HMRC issued guidance on 6 July which outlined that COVID-19 testing kits were to be classified as a taxable benefit-in-kind.
However, the Treasury Select Committee criticised this decision and highlighted that tax bills could build up as employers purchase large numbers of tests.
Mel Stride, Chair of the Treasury Select Committee, 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.’
A spokesperson for the Treasury said: ‘Given the importance of widespread testing, we want to ensure that all employers who wish to provide third-party testing to their employees can do so without increasing their tax liability.
‘So we will introduce a new income tax exemption for COVID-19 antigen tests provided by employers. HMRC will amend its guidance as soon as possible to reflect this change.’
