Expanding workplace benefits relief
Updated 28 November 2025
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Who is likely to be affected
Any employer who chooses to reimburse employees for the cost of certain low-value benefits-in-kind (BIKs), specifically eye tests, flu vaccines and home working equipment, and those employees who receive these reimbursements.
General description of the measure
This measure will introduce new legislative exemptions for the reimbursement of accommodation, supplies or services used in performing employment duties, and for both the reimbursement and direct provision of flu vaccinations.
It also extends the existing exemption for eye tests and corrective appliances to cover reimbursements, ensuring consistency with direct provision.
Policy objective
This measure supports a simpler and more efficient tax system by reducing administrative burdens for employers, particularly in relation to minor reimbursements. It responds to consistent stakeholder feedback calling for the treatment of low-value benefits-in-kind to better reflect modern working practices. The measure promotes fairness and consistency in the treatment of minor employer-provided support, aligning with the government’s broader objective to create a tax system that is streamlined and responsive to the needs of both employers and employees.
Background to the measure
This measure responds to consistent feedback from employers and external advisers, gathered during HMRC’s 2023 review of low-value and occasional benefits. Stakeholders highlighted that reimbursements for items such as eye tests, flu vaccines, and home working equipment should be treated in the same way as when those items are provided directly by the employer.
Detailed proposal
Operative date
The measure will have effect on and after 6 April 2026.
Current law
Currently, under Income Tax legislation, the exemptions for eye tests, home working equipment, and flu vaccines only apply where the employer provides the benefit directly. These exemptions do not extend to situations where the employer reimburses the employee for the cost. The relevant provisions are:
Income Tax:
Section 316 ITEPA 2003: Exempts employer-provided home office equipment from income tax but does not cover reimbursements.
Section 320A ITEPA 2003: Exempts employer-provided eye tests from income tax, but again excludes reimbursements.
Flu vaccines are not currently covered under any specific income tax exemption.
National Insurance contributions:
Eye Tests: Under Regulation 25 and Paragraph 9 of Part VIII, Schedule 3 to the Social Security Contributions Regulations (SSCR) 2001, reimbursements for eye tests are disregarded from Class 1 National Insurance contributions where the employee is required to use display screen equipment.
Flu Vaccines: There is no existing National Insurance contributions disregard for the reimbursement of flu vaccines.
Home Working Equipment: There is no existing National Insurance contributions disregard for the reimbursement of home working equipment.
Proposed revisions
Legislative amendments to cover reimbursements for certain minor benefits. These changes will ensure that reimbursements are treated consistently with direct provision.
Income Tax:
A new section (316ZA): Will be inserted to exempt the reimbursement of expenses incurred by an employee on behalf of the employer in respect of the provision of accommodation, supplied or services used in performing employment duties.
Section 320A: Will be amended to extend the existing exemption for eye tests and special corrective appliances to allow employers to provide these benefits through reimbursement.
A new section (320D): Will be introduced to exempt both the direct provision and reimbursement of influenza vaccinations for employees, provided these are not made under salary sacrifice arrangements.
National Insurance contributions:
Flu Vaccines: A new Class 1 National Insurance contributions disregard will be introduced through regulations under Section 3(3) SSCBA 1992.
Home Working Equipment: A new Class 1 National Insurance contributions disregard will also be introduced under Section 3(3) SSCBA 1992.
Summary of impacts
Exchequer impact (£ million)
| 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 |
|---|---|---|---|---|---|
| Negligible | Negligible | Negligible | Negligible | Negligible | Negligible |
This measure is expected to have a negligible impact on the Exchequer.
Macroeconomic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure will impact an unknown number of individuals whose employers offer these exemptions and may choose to do so through reimbursement. Employees need to be aware of the change so they can claim reimbursements for low-value items such as eye tests, flu vaccines and home office equipment.
The number of individuals impacted is expected to be modest and will depend on employer uptake.
This measure is not expected to impact on family formation, stability or breakdown.
This measure is expected overall to impact individuals’ experience of dealing with HMRC by making the rules simpler, easier to understand, and more flexible.
Equalities impacts
An individual may be affected by this measure regardless of their protected characteristics. If a protected group is overrepresented in this population, then it will be disproportionately impacted. HMRC does not currently hold data on the protected characteristics of individuals impacted by this measure and so cannot make an assessment of the impacts on those with shared protected characteristics.
This measure applies equally to all devolved nations.
Administrative impact on business including civil society organisations
This measure will have a negligible administrative impact on businesses offering low-value benefits-in-kind to employees. They will need to be aware of the change to the exemptions and apply them accordingly.
One-off costs may include familiarising themselves with the revised rules, updating software and colleagues of the change. It is not anticipated that there will be any ongoing costs.
This measure is not expected to disproportionately impact civil society organisations.
This measure is expected overall to have no impact on business’ experience of dealing with HMRC as the change doesn’t alter any processes or tax administration obligations.
Operational impact (£ million) (HMRC or other)
HMRC is not involved in the operation of the benefit relief by employers and this will continue. Other than updating guidance, there is no operational or delivery cost impact for HMRC.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax returns compliance activity.
Further advice
If you have any questions about this change, contact policyemploymentbenefitsexpenses@hmrc.gov.uk.