No tax exemption for flu vaccine reimbursements

The expense of vaccinations in the workplace or providing a voucher for employees to get vaccines at a pharmacy is tax-deductible since it falls within the trivial benefit guidelines.

During the epidemic, however, this was less feasible, especially where employees were working from home and voucher providers were unable to meet demand. As a result, you may have resorted to urging employees to arrange their own vaccinations and offering to compensate them for the cost.

Please keep in mind that reimbursing the expenditure does not fall under the trivial benefit rules, which means you must deduct income tax (under PAYE) and class 1 national insurance contributions in full (NIC).

You can utilise a PAYE settlement agreement (PSA) to satisfy the tax and NIC fees to avoid the trouble of grossing up the cost via payroll, albeit this does not usually apply to cash reimbursements. HMRC has clarified that if voucher schemes are not available, you can use a PSA to cover your employees’ tax and NIC obligations.