The Digital Age

In an era of rapid and burgeoning advancments in digitsation as well as aritifical intelligence, an area overlooked by many is the ever-increasing amount of time spent by us on digital equipment ranging from phones and computer screens to TVs and tablets. Given the sheer involement of electronic equipment in the working life of multiple professions from finance and professional services through to human resources and marketing, it is important for employers to recognise the impact on their employees’ eyes of prolonged periods of screen time.

How Employers Can Help

Many employers seek to offer support by being willing to pay for eye tests and glasses or contact lenses for their employees. At first glance, this might appear harmless given the plethora of tax and accounting courses which mention these as exempt benefits in kind. Even HMRC’s website at a very simplistic level includes these services as an exempt BIK which re-inforces the idea that glasses or contacts can be provided regardless of any personal use.

The Need for Due Diligence and Professional Competence

Dig deeper into the technical guidance such as the National Insurance Manual (NIM) NIM02145, and one notices the potential tax traps which one can fall short of if sufficient and appropriate care isn’t taken.

HMRC’s guidance on both eye-tests and glasses is as follows:

Provided the glasses and/or eye-tests are made available to all employees who engage in the use of a Visual Display Unit (VDU):

1] Eye-sight tests arranged for by either the employer or employees are deemed to be an exempt benefit in kind (BIK) as mentioned above hence the employer can contract with an optician to enable the provision of these to its employees.

2] If the need for glasses (or contact lenses) with a prescription specific to the VDU used at work arises from the eye-sight test, then any payment for glasses (or contact lenses) arranged for by Employer will also be deemed to be an exempt BIK.

However, if the test identifies a general need for glasses, and as well as the special prescription for VDU use the employer pays for or reimburses the whole amount, liability for Class 1 NICs arises on the amount which exceeds the VDU-related prescription.

Conclusion

Hence, any payment for glasses or contacts for general use of the staff would create a tax liability which both the employer and employee wouldn’t be apathetic towards until the glare of the taxman falls on these.

So if you’re an employer looking to facilitate your employees’ working resources by providing an eye test or glasses, ensure any glasses or contacts are tailored to the workplace VDU. If the test determines a general need for glasses, it is important that you only contribute to the element relating to the VDU to avoid a tax liability later down the line.

For more information about tax and areas where your company can become tax efficient, contact Cheylesmore Accountants today to enable us to provide you with an end-to-end service including advice on how optimise your company’s financial affairs. With various packages containing services ranging from just bookkeeping through to Virtual Finance Office and Tax Investigations, you can rely on us to deliver a quality experience and provide comfort that your tax affairs are in order.