06 August 2020 
Julia Ascott, Employment Taxes Specialist
HMRC initially took the position that third party Covid tests provided by employers for their employees were a taxable benefit in kind that could be reported on a PAYE Settlement Agreement.
After the Treasury Select Committee criticised HMRC's position, the Treasury issued this statement:
‘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.’
To be clear, if you pay for Covid 19 tests for your employees, this WILL NOT be a taxable benefit.
