Autumn Budget 2025: The government has announced that the income tax and national insurance (NI) exemption for employer-provided benefits will be extended.
In the Autumn Budget, it stated that it will expand workplace benefits relief to cover reimbursements for eye tests, home working equipment, and flu vaccinations. The extension will take effect from 6 April 2026.
This will be legislated for in the Finance Bill 2025-26.
Jonathan Berger, employment tax director at Grant Thornton UK, said: “The confirmation of the income tax and NI exemptions for some employer-provided workplace benefits will be welcomed by employers and will simplify the process of offering and reporting these benefits. This is a common-sense change which formalises the approach that many employers were taking in their end-of-year reporting by applying the underlying tax exemption. It does not, however, address the ambiguity of the reporting of trivial benefits, which still remains a challenge, and on which it would be helpful for HMRC to provide greater clarity in the future.”
Michael Carter, partner at Osborne Clarke, added: “The changes on the income tax and NI exemption for employer-provided benefits, which will be extended to cover reimbursements for eye tests, home working equipment, and flu vaccinations, is to be welcomed. Currently, the exemption only applies where the employer provides the benefit directly. This change from 6 April 2026 will ensure that situations where the employer reimburses the employee for the cost will be treated in the same way.”
Caroline Harwood, head of employment tax at BDO, said: “The exemptions from income tax and NIC available for eye tests, home office equipment, and flu vaccinations currently only apply when an employer organises and pays for the benefit directly for employees. However the exemption will now be extended to also include scenarios where the employer reimburses these costs. This easement is intended to reflect modern working practices and should assist employers when deciding how to apply exemptions, in particular on their PAYE Settlement Agreement. It is a welcome easement and will simplify use of the exemptions.”
Debra Clark, head of wellbeing at Towergate Employee Benefits added: “Anything that encourages businesses and individuals to invest in their wellbeing, including eye health and protection against flu, is a welcome move. However, these are relatively low cost interventions and the government could have been more impactful in other ways, especially supporting the Mayfield Keep Britain working report and a bigger focus on all round prevention and earlier intervention for those working.”
