The publication of legislation to extend income tax exemptions for eye tests, glasses, and home working equipment to include costs reimbursed by employers, has been welcome by the Chartered Institute of Taxation (CIOT).
A new exemption for flu vaccinations has also been extended to employer reimbursements.
These changes will take effect from 6 April 2026.
But the CIOT is calling for the government to go further and treat all employer reimbursements in the same way for tax purposes – as if the employer had directly provided the benefit in question.
Ellen Milner, CIOT Director of Public Policy, said: “We welcome this legislation, which will exempt a number of minor benefits-in-kind from income tax and National Insurance. The CIOT has previously recommended introducing these changes and we are pleased to see that the government is acting to remove from taxation low value benefits that are a common part of modern working life.
“The extension of the exemption for eye tests and glasses corrects an anomaly in existing legislation that only allows an income tax exemption when an employer directly pays for these or provides a voucher. The existing situation is contrary to our understanding of the original policy intent, which was to also permit tax-exempt reimbursement by an employer of costs that an employee has directly incurred.
“It is often administratively less burdensome for an employee who works from home to purchase the equipment they require to work from home, rather than the employer buying it and having to coordinate delivery. The tax exemption for home-working equipment will enable employers to reimburse employees for the full equipment costs they have directly incurred – with no tax charge – where that equipment is necessary for the employees to perform the duties of their employment.
“Many employers provide vaccinations such as annual flu jabs to their employees. Until now they’ve had to rely on the trivial benefits exemption to exempt the costs, and this only applies where the employer directly pays for the jabs or provides a voucher. The exemption for vaccination costs will make it easier for smaller businesses, which are less likely to be able to arrange for a nurse to visit the workplace or to obtain vouchers for immunisations, to cover the costs of flu jabs for their employees.”
