Accounting Matters
with PKF FPM

Changes to Employee Expenses

I reimburse my employees travel and subsistence expenses towards the cost of business trips and have recently been advised that I should have a Dispensation from HM Revenue and Customs. What is the benefit of a Dispensation?


A dispensation is an agreement that allows employers to pay specified expenses to their employees without deducting Tax or NIC or reporting the payments to HMRC. Without a Dispensation agreement from HMRC the payment or reimbursement of travel and subsistence expenses, even though they are qualifying business expenses, should be returned on annual P11D Returns of Benefits and Expenses. Employees can in turn make a separate claim to HMRC for tax relief on such expenses.

In order to avoid the reporting of such qualifying expenses and avoid the hassle for employees having to claim relief, it is always advisable to have a Dispensation in force.

However, HMRC are currently in the process of introducing proposals which will mean employers will no longer need to apply for a dispensation to receive this treatment. Instead employers will be permitted to make expenses payments to employees without deducting Tax or NIC or report them to HMRC as long as they can satisfy themselves that the expenses being reimbursed qualify for tax relief in full. This will be done by employers own internal checking procedures. This will be of great benefit to both employers and employees and will cut out the administrative burden of reporting requirements on such qualifying expense payments. No date has yet be set for the implementation of the above, but if approved could be introduced as earlier as 6th April 2015.

The advice in this column is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.


Why not have a look at some past insights provided by PKF FPM...

Invest in New Assets

Share the Wealth with Loyal Employees

Succession Planning

New Disclosure Campaign Announced

National Insurance Changes

Sir John Parker Leadership Talk

Boost Productivity and Morale with Incentives

Real Time Information

Tax Free Cash Extraction

VAT Bad Debt Relief

Budget Overview and 10 Tax Tips

A new PAYE system is set to be unleashed next month. How will this impact my business?

I'm going to find it hard to pay my tax bill by 31st January

Can I reward my staff this Christmas without having to pay income tax and national insurance to the taxman?

Question: How can I improve my company's tax liabilities?


Meet the Partners:

Ulster Business School

Meet the Champions:

McKinty and Wright
Dokoo Digital
The Energy 
Contact Us

Privacy Statement

The cookie settings on this website are set to ‘allow all cookies’ to give you the very best experience. If you continue without changing these settings, you consent to this – but if you want, you can change your settings at any time by changing the privacy settings of your browser.

Find out more about cookies >