Coronavirus: Workers offered regular COVID-19 tests ‘face mounting tax bill’, chancellor told

Workers offered regular coronavirus tests by their employers could face a mounting tax bill, a senior MP has warned.

Former cabinet minister Mel Stride, now the chair of the House of Commons Treasury committee, has written to Chancellor Rishi Sunak to urge him to look into the matter.

Mr Stride noted how HMRC guidance published this week states that COVID-19 testing kits – or tests carried out by a third party – which have been purchased by employers for their staff are treated as a taxable benefit in kind on the employee.

The Tory MP warned many key workers could be faced with the “perverse incentive of avoiding employer-sponsored tests in order to reduce their tax bill”.

Benefits in kind are benefits that employees receive from their employers that are not included in their salary.

A cash value is assigned to taxable benefits in kind, and employees pay income tax on this amount through Pay As You Earn (PAYE).

In his letter to the chancellor, Mr Stride wrote: “Given that many employers will require these tests on a regular basis, especially in health care settings but also in many other industries (such as hospitality), the tax bills could soon mount up and this does not seem to be a helpful policy at this time.”

Mr Stride also warned Mr Sunak that the current policy “risks deterring workers from taking employer-sponsored tests”.

“Many of those affected will be in front line jobs in hospitals and other similar settings, and it seems wrong that a disproportionate tax burden should fall on them at this time,” he added.

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