With many people returning to the workplace, Phillip Redhead of Accounts Action (SE) Ltd, spotlight on a particularly topical issue
For the autumn article in my series on health care matters I thought I would look at tax matters surrounding PPE equipment provided to employees.
Although restrictions are easing as more people are vaccinated, the level of Covid infections continues to remain high. PPE equipment is still a fact of daily life, to protect the health of your client’s employees and customers, particularly in public facing and healthcare businesses.
However, surprisingly, clients need to be careful to ensure that the PPE and other protective items such as screens and ventilation equipment) is not excessive in relation to their risk assessment.
PPE is an allowable expense
In general, where PPE is provided by a business to its employees in line with the business risk assessment, this is allowable expenditure, to ensure the employer complies with their health and safety obligations. Importantly, the provision of this PPE is tax allowable and would not result in any benefit in kind.
But tax issues can arise
Issues can arise, however, when a higher level of PPE is used for precautionary or preventative reasons. HMRC consider this to be above and beyond what is ‘necessary’ and therefore this would not pass the ‘whole, exclusively and necessarily’ test.
HMRC has confirmed that any extras that the employer voluntarily provides in excess of essential items of PPE will create a benefit in kind. This can be mitigated by the trivial benefits rules where the benefit in kind is less than £50 per employee.
Where an employee provides additional PPE at their own expense the existing guidance from HMRC is that if this is more than their employer considers necessary and their contract does not require them to provide this PPE then no tax relief is available to the employee.
Counterintuitive of HMRC
Given the global situation, this would seem to be somewhat counterintuitive – but HMRC have confirmed this position.
In practice, the important point is that your client’s Covid risk assessment should clearly identify the type and level of PPE that is required to protect their employees effectively, and have consideration of this when purchasing the PPE and other equipment to protect their health and safety.