In this week’s update, the easement for taxable earnings affected by travel restrictions as a result of COVID-19 ends tomorrow 5 April 2022. However, the tax exemption for employer-provided and employer-reimbursed COVID tests continues in 2022/23. The Public Accounts Committee has issued its report on HMRC's management of tax debt, particularly in the context of the pandemic. The report contains six conclusions together with related recommendations.
Easement for non-resident employees ends tomorrow
In 2020, HMRC published guidance in its Employment Manual stating non-UK resident employees stranded in the UK because of COVID-19 travel restrictions would not be taxed on earnings for duties performed in the UK after their planned departure date, provided they are taxed in their home state.
This easement ends tomorrow 5 April 2022 as travel restrictions have been largely withdrawn meaning it is no longer ‘just and reasonable’ to treat these duties as performed outside the UK.
If a taxpayer is non-UK resident, ordinarily any days they spend working in the UK will be treated as days on which they performed duties in the UK. From 6 April 2022, this will be the case even if they are prevented from leaving the UK as a result of COVID-19 related circumstances.
Tax exemption for employer-provided and employer-reimbursed COVID tests
Legislation has been passed extending the income tax and national insurance exemption for employer-provided and employer-reimbursed COVID-19 tests into 2022/23. The exemption had been due to end on 5 April 2022 but now also applies to payments made by employers for these purposes in 2022/23.
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