Exemptions for COVID-19 testing and home office equipment

The measure

The government has made a number of announcements related to COVID-19 easements. These include:

• the introduction (with retrospective effect) of an exemption from income tax for employer-reimbursed coronavirus antigen tests. This will apply to reimbursements during the 2020/21 tax year. The corresponding exemption for National Insurance contributions (NICs) is already in force;
• an extension to the exemptions from income tax and NICs for both employer-provided and employer-reimbursed antigen tests until the end of the 2021/22 tax year; and
• an extension to the income tax and NICs exemption for employer-reimbursed expenses that cover the cost of relevant home office equipment until the end of the 2021/22 tax year.  

Who will be affected?

These measures are likely to apply to a wide range of employers and employees. Many employers have chosen to support employees working from home because of the pandemic and have welcomed the opportunity to provide relevant equipment tax-free for employees or to provide equivalent reimbursement. Many others with employees in frontline jobs will want to be able to continue to provide tax-free COVID-19 testing.

When will the measure come into effect?

These exemptions will continue to apply for the 2021/22 tax year.