ECH10055 - Employer Support Team: Dispensations - What Can and Cannot be Included

Detailed guidance on what can and cannot be included in a dispensation is contained in the Employment Income Manual. The attached tables provide a summary of those items.

Items which can be included in a dispensation

Items which cannot be included in a Dispensation

Scale rate Payments

In general, scale rates are only appropriate for inclusion in a dispensation where employers reimburse expenses which are

• widely incurred,
• in broadly similar amounts, and
• for which it is often difficult for employees to get receipts.

The guidance at EIM 05100 and 05200 should be followed.

Where a request is made for a dispensation to include a scale rate payment evidence should be sought to ensure that the sum does no more than meet the expense incurred. Evidence of expense incurred by a random sample of 10% of eligible employees, for a period of one month, will normally be acceptable.

Statutory Exemptions

Often employers apply for a dispensation for items that have a statutory exemption. Where such an application is received the employer should be advised that a dispensation is not appropriate and their attention drawn in writing to the statutory provision.

Current statutory exemptions for which dispensations are frequently requested are shown in the attached table. (This list is not exhaustive and may be subject to change)

Airline Sector Flight Duty Allowance

Airline FDA can not be included within dispensations.

The PAYE, SA & NICS (PSN) site under Specialist Notes, Documents and links

provides information on how Airline Sector FDA’s should be dealt with. PSN should be contacted where further guidance is required. See also ECH13090.