ECH22105 - Settlement: Dispensations

Including expenses on forms P11D, where they could be covered by a dispensation can be

• a burden for the employer
• for an employee who has to declare them and make a claim, and
• a lot of extra work for HMRC in processing the forms.

Although expenses covered by a dispensation do not need to be returned on form P11D the employer should still maintain adequate records relating to the calculation and payment of those expenses.

Where a dispensation is in place you should

• fully review the dispensation
• ensure the employer's systems are adequate, for example, receipts are retained, claims are countersigned or adequately reviewed
• deal with any problems, and
• complete form ECR308

Where a dispensation is not in place you should

• consider whether one may be beneficial to the employer and in appropriate cases
• encourage the employer to apply for a dispensation
• supply or issue leaflet P11DX and
• refer the relevant details to the EST on form ECR308 ( ECH10065).

More information on Dispensations is contained at EIM30051 onwards.