During September, the NHS launched its national winter programme to vaccinate those considered at higher risk from covid and flu. The programme has started earlier this year, given the recent rise in a new covid variant.

For those who are not eligible for a flu vaccine on the NHS, it is possible to acquire one privately and employers might want to help staff to get vaccinated by funding the cost. However, for tax purposes, employers need to take care how they pay for any flu vaccines to avoid creating a tax charge for themselves and their staff.

What is tax-free?

Where an employer arranges a flu vaccination session at work, or provides vouchers that can be redeemed from a pharmacy or similar provider, then provided the cost is no more than £50 per individual, this can be provided tax-free, as it should qualify as a trivial benefit.

What creates a tax charge? 

Where employers don’t want to provide jabs at work, can’t find a voucher provider, or have workers who can’t use their chosen voucher scheme, it might be tempting for the employer to offer to reimburse a jab that the employee books and pays for themselves.

Although the outcome is the same (a vaccinated member of staff, with the cost ultimately borne by the employer), for tax purposes, the reimbursement of a cost incurred by a staff member is treated differently to the provision of a voucher. In this case, any reimbursement will not meet the conditions to be treated as a trivial benefit, and the employee will need to pay income tax and national insurance contributions (NICs) on this sum. There will also be an employer’s NIC cost too.

At the ATT we consider this approach unhelpful, and we have made representations to HMRC on the issue as part of our response to a recent consultation which proposes making a change to these rules. But while the rules remain as they are, employers will need to use vouchers if they don’t want the additional cost and administration of accounting for tax on reimbursed flu jabs.   

Covid vaccines

After previous campaigns covering much of the population, the Government’s current winter campaign for covid-19 is focused on those considered at most risk – primarily those over 65 and with underlying health conditions.

As it stands, covid vaccines are not currently available to buy privately, although there has been some discussion in the press that this might change. If they do become available, then it is possible that some employers will want to consider making covid vaccines available to their staff.

If so, then the final cost of the private jabs will be key when it comes to tax. Some reports are suggesting that a single jab could cost in the region of £100, which is double the current trivial benefits limit of £50. At this price, an employer providing a covid vaccination voucher would be providing a taxable benefit in kind which would create an income tax charge for the employee, and an NIC charge for the employer – all of which would need to be accounted for on a P11D. This additional administration and cost may mean that covid vaccines are a less popular ‘perk’ for employers to provide.    

This article reflects the position at the date of publication (14 September 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.   

We regularly publish articles on a range of tax and wider topical issues which affect employers. If you wish to subscribe to our monthly Employer Focus e-newsletter, please contact us.