Millions of UK workers can now claim reimbursements for three additional expense categories thanks to a recent HMRC rule change effective from April 6. Previously, reimbursements for items such as eye tests, home working equipment, and flu vaccinations were only exempt from income tax and National Insurance if the employer had directly arranged and paid for them. Now, employees who pay upfront and seek reimbursement will also benefit from tax and National Insurance exemptions.
This update broadens the existing exemption on eye tests and corrective appliances to include accommodation, supplies, or services used for work purposes. Additionally, both the reimbursement and direct provision of flu vaccinations are now tax-free.
The government emphasizes the simplicity this change brings. Employees are encouraged to claim expenses for low-cost items like home office equipment, flu vaccines, and eye tests without concern for additional tax burdens. While the number of individuals impacted depends largely on employer uptake, the measure aims to make tax rules clearer, more flexible, and easier to navigate.
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The Treasury highlights that this aligns with the government’s broader goals of simplifying tax reporting, reducing errors, and narrowing the tax gap.
Employers currently have the option to voluntarily register to report benefits in kind to HMRC in real-time before the tax year starts. However, from April 2027, this reporting will become mandatory for all employers, who must then pay Income Tax and Class 1A National Insurance on benefits in kind in real time.