Employee eye tests – Is HMRC losing sight?

25 March 2023
Under The Health and Safety (Display Screen Equipment) Regulations 1992, employers must provide an eye and eyesight test, and special corrective appliances (ie glasses or similar) if necessary, for display screen equipment (DSE) users that request one. However, a recent unpublicised update to HMRC’s internal guidance suggests that an unexpected benefit-in-kind may arise where the cost is incurred by the employee and subsequently reimbursed by the employer.


It is now common for many employees to be required to use DSE for continuous periods of an hour or more on a daily basis. Under health and safety regulations this requirement places a legal obligation on their employer to provide them with a full eye and eyesight test if they ask for one, and provide glasses etc if the test shows an employee needs them only for DSE use.

A corresponding tax exemption applies, and hence no chargeable benefit-in-kind arises, if the provision of the test or glasses etc is required in accordance with health and safety regulations and the tests and glasses are made available generally to employees who have qualifying use of DSE.

Some employers comply with the legislation by setting up a corporate account with an optician, whilst others, particularly smaller employers, may currently permit employees to book and pay for the test at a convenient location and claim reimbursement from them.

HMRC guidance updated

HMRC recently added one sentence to the last paragraph in the relevant section of its internal guidance manual stating that, ‘where the cost of an eyesight test, spectacles or contact lenses is reimbursed to the employee, a taxable benefit arises’. To date there has been no wider communication of this important but concerning development.

Our thoughts

It is disappointing that this crucial sentence has been added HMRC’s internal manual, with no apparent consultation or communication to employers. If the stated position is maintained, then, strictly, any relevant costs reimbursed by the employer to the employee where the employee has arranged the test and/or glasses etc directly will need to be treated as subject to income tax and National Insurance contributions (NICs) through the operation of PAYE, although it may be possible for affected taxpayers to subsequently challenge this treatment.

As a general point, it seems illogical and unreasonable that, where the conditions are met for a test to be required under health and safety legislation, certain employers that do not have the resources, or are otherwise unable, for whatever reason, to set up corporate accounts, and their employees, will be penalised. In this regard, we note that the Health and Safety Executive website currently states that ‘it is up to the employer how they provide the test. For example, they could let users arrange the tests and reimburse them for the cost later…’, with no reference to the apparent tax and NICs consequences of this choice. Furthermore, it is notable that when the legislation introducing the exemption for eye and eyesight tests and special corrective appliances was introduced in 2006, the explanatory notes stated that, ‘eye tests and special corrective glasses will be exempt from a tax charge, irrespective of how an employer decides to pay for them.’

As the original intention of the legislation was clearly to provide an exemption for reimbursed costs of this nature, it is to be hoped that HMRC may see the light and amend its guidance accordingly. In the meantime, employers incurring such costs should take professional advice on how to deal with them in the context of meeting their PAYE obligations.

For more information, please get in touch with David Williams-Richardson or your usual RSM contact.